Analysis of Reliability and Warranty Claims in Products With Age and Usage Scales

Failures or other adverse events in systems or products may depend on the age and usage history of the unit. Motivated by motor vehicle reliability and warranty data issues, we present models that may be used to assess the dependence on age or usage in heterogeneous populations of products, and show how to estimate model parameters based on different types of field data. The setting in which the events in question are warranty claims is complicated because of the sparseness and incompleteness of the data, and we examine it in some detail. We consider some North American automobile warranty data and use these data to illustrate the methodology.