Mahalanobis-taguchi System for Warranty Cost Prediction: A Comparison of Mahalanobis Distance Techniques

Abstract

In any competitive market, businesses need to differentiate their offerings. Many industries use a warranty as an offering that not only differentiates the product or service, but also extends the customer's expected durability of the product or service. by offering to share the risk of a customer's purchase in the form of a warranty, a business assumes the cost of poor quality and therefore should have a vested interest to reduce this cost thus maximizing its profits. Warranty cost prediction methods are used by many leading companies, but these methods typically only focus on failure reduction as cost avoidance. Additional dimensions should be considered when predicting warranty cost. by using the Mahalanobis- Taguchi System, a service or product's warranty cost can be predicted using multiple characteristics thus providing a more complete estimate. the Mahalanobis-Taguchi System also enables businesses to estimate their warranty cost as early as conceptual design, due to the method's ability to forecast based on small, correlated data sets. This paper presents the application of the Mahalanobis-Taguchi System to forecast warranty cost based on multivariate data. a case study utilizing warranty data is provided to illustrate the method and provides a comparison of different techniques for calculating the Mahalanobis distance. Copyright© (2009) by the American Society for Engineering Management.

Department(s)

Engineering Management and Systems Engineering

Keywords and Phrases

Gram-schmidt; Ideal function; Mahalanobis distance; Mahalanobis-taguchi system; Warranty cost

International Standard Book Number (ISBN)

978-161738105-8

Document Type

Article - Conference proceedings

Document Version

Citation

File Type

text

Language(s)

English

Rights

© 2024 American Society for Engineering Management, All rights reserved.

Publication Date

01 Dec 2009

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