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White Paper

Optimizing the Warranty Reserve: Attaining Balance Between Customer Satisfaction and Profitablity

 

Customer retention and new customer acquisition are crucial elements of business strategy for organizations. Warranty services are a key factor in attaining market success by ensuring customer satisfaction and attracting new customers.

However, organizations need to balance the growing levels of warranty claims with profitability. To achieve this, organizations must estimate and provision a right-sized corpus called “warranty reserve” beforehand, to balance claim disbursals and profits.

In this white paper, we outline a modeling approach to estimate right-sized warranty reserves by employing statistical techniques such as the Weibull and Markov process.