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Imprecise inference for warranty contract analysis

Author

Listed:
  • Utkin, Lev V.
  • Coolen, Frank P.A.
  • Gurov, Sergey V.

Abstract

This paper presents an investigation into generalised Bayesian analysis of warranty contracts, using sets of prior distributions within the theory of imprecise probability. Explicit expressions are derived for optimal lower and upper bounds for the expected profit for the manufacturer of a product, corresponding to an imprecise negative binomial model for which two sets of prior distributions are studied. The results can be used to set a maximum value of compensation such that the manufacturer׳s expected profit remains positive, under vague prior knowledge.

Suggested Citation

  • Utkin, Lev V. & Coolen, Frank P.A. & Gurov, Sergey V., 2015. "Imprecise inference for warranty contract analysis," Reliability Engineering and System Safety, Elsevier, vol. 138(C), pages 31-39.
    • Handle: RePEc:eee:reensy:v:138:y:2015:i:c:p:31-39
    DOI: 10.1016/j.ress.2015.01.011
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    References listed on IDEAS

    as
    1. Wu, Shaomin, 2013. "A review on coarse warranty data and analysis," Reliability Engineering and System Safety, Elsevier, vol. 114(C), pages 1-11.
    2. Kelly, Dana & Atwood, Corwin, 2011. "Finding a minimally informative Dirichlet prior distribution using least squares," Reliability Engineering and System Safety, Elsevier, vol. 96(3), pages 398-402.
    3. Gupta, Sanjib Kumar & De, Soumen & Chatterjee, Aditya, 2014. "Warranty forecasting from incomplete two-dimensional warranty data," Reliability Engineering and System Safety, Elsevier, vol. 126(C), pages 1-13.
    4. David Stephens & Martin Crowder, 2004. "Bayesian analysis of discrete time warranty data," Journal of the Royal Statistical Society Series C, Royal Statistical Society, vol. 53(1), pages 195-217, January.
    Full references (including those not matched with items on IDEAS)

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