Impact of uncertainty affecting reliability models on warranty contracts

Warranty of products is a way for manufacturers to raise their clients' trust and, for customers, to protect themselves against economical consequences of malfunctions. The warranty contract may include a bonus (or a penalty) associated with the realization of a prescribed performance level (a number of failures in a fixed period). Such an adaptive warranty contract allows negotiation with the client in order to provide the best service at a low cost during the warranty period. In order to predict the final balance of the warranty contract, the system under warranty can be simulated using reliability laws. In this paper, we will focus on the identifica-tion of reliability laws based on historical data (operational reliability) and on the impact of the uncertainty that appears in the identification process on the studied warranty contract.