METHODOLOGY FOR CALCULATING THE COST OF WARRANTY OBLIGATIONS

Abstract

The paper describes the methodology for calculating the cost of warranty obligations of products manufactured by a supplier that allows estimating a predicted repair cost over the period of warranty obligations and including it into the structure of a product’s price on the basis of the duration of the warranty obligations period. The cost calculation is performed for various types of warranty obligations with consideration of different stages of operation of a product. Generally, a product consists of constituent parts manufactured by a producer, and parts purchased from other manufacturers. Warranty periods for self-produced constituents and for purchased parts can either coincide or differ.