Warranty analysis

The process of using information about past warranty claims to predict the number and cost of warranty claims in the future. Warranty analysis helps you allocate resources to address future product failures, avoiding wasteful over-planning or inadequate under-planning.

For example, you manage the warranty claims department at a company that manufacturers lawn mowers that are covered by a one-year warranty; the cost your company incurs for each warranty claim is $1000. Every month, you record the number of lawn mowers from each shipment that fail within the warranty period. Minitab's Warranty Prediction command analyzes this historical warranty data, helping you project the resources needed to address future warranty claims.

The following graph predicts the cumulative cost of warranty claims for the next six months and displays a confidence interval for this prediction. With 95% confidence, you conclude that the cumulative cost of all valid warranty claims in the next six months will be between $60,000 and $92,000. You adjust your department budget accordingly.