Prognostics-based product warranties

Prognostics and health management (PHM) is an enabling discipline consisting of technologies and methods to assess the reliability of a product in its actual life cycle conditions and evaluate its remaining useful life. This paper presents the application of PHM methods as a proactive and predictive means to enable new warranty approaches. Warranty service is typically performed after the occurrence of failure. However, with the implementation of the predictive and proactive warranty strategies enabled by PHM, companies can make decisions for warranty returns up front. The prognostics-based warranty models developed in this paper include part-based warranty return, lifetime warranty, and customized extended warranty, and a case study of warranty validation and user abuse detection is also provided. The results of this work can increase the competitiveness of businesses by reshaping their warranty policies, improving their maintenance practices under warranty, and reducing their warranty costs.