WARRANTY CLAIM INSPECTION STRATEGY TO MINIMIZE WARRANTY FRAUD CAR BATTERY CASE STUDY

• Main Author: Annisa Farhani, Yuniar
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/68788
• Institution: Institut Teknologi Bandung

Warranty fraud cases are no longer new to the automobile industry. Around the world, the warranty costs incurred by car manufacturers reach 5% of the total production costs with the number of warranty frauds revealed reaching 10% of the total warranty claims. One example of a car manufacturer in Indonesia that also faced a warranty fraud case is PT X. In 2019, PT X found car battery warranty fraud in 21% of 257 inspected warranty claim samples. Each year, these car battery warranty fraud cases result in financial losses of up to hundreds of millions of rupiah for PT X. However, until now, warranty fraud cases are still not given enough attention in Indonesia even though there are already laws and regulations governing fraud. In this research, warranty claim data is tested using statistical methods and the mean absolute deviation method to determine the characteristics of warranty claim data. Then modeling the warranty provider's decision with the service agent warranty cheating model by Murthy and Jack (2016) which is based on game theory. Followed by the calculation of estimated warranty costs with the warranty cost model by Blischke and Murthy (2019) which is based on the Weibull distribution time to first failure. Using the optimal decision obtained, the best decision for the warranty provider to minimize warranty fraud, i.e., setting a minimum penalty value of IDR 1,300,000.00 or multiples thereof, and conducting an inspection when the probability value of the inspection decision is greater than 0.09.