WARRANTY FRAUD REDUCTION THROUGH INSPECTION AND COMBINATION WARRANTY POLICY FOR AUTOMOTIVE BATTERIES

• Main Author: Alfiah Fajri, Asri
• Format: Theses
• Language: Indonesia
• Subjects: Teknik (Rekayasa, enjinering dan kegiatan berkaitan)
• Online Access: https://digilib.itb.ac.id/gdl/view/83038
• Institution: Institut Teknologi Bandung

Annual warranty costs for global car manufacturers increased from 2018 to 2022, with warranty fraud claims estimated to account for 3-15% of total warranty costs. The significant warranty costs and high fraud rates highlight the importance of effective strategies to combat this fraud to reduce the warranty cost burden on manufacturers and minimize the number of fraudulent claims. This study aims to minimize warranty fraud related to car batteries produced by PT. X by determining warranty policies and inspection actions that can lower warranty costs. The model developed in this study comprises three main components: the car battery failure model, the warranty policy model, and the decision-making model. The car battery failure model was developed using the lifespan data from car battery warranty claims recorded and inspected by PT. X in 2019. This data was used to determine the best failure distribution representing the failure pattern of car batteries. The warranty policy model considers the Pro-Rata Warranty (PRW) policy and a combination of the Free-Replacement Warranty (FRW) and PRW policies. This model was developed to estimate the warranty costs that manufacturers and consumers would incur based on the implemented warranty policy. Next, the decision-making model was designed to assist manufacturers in determining the appropriate warranty policy, optimal inspection actions, and effective penalty amounts for consumers proven to commit warranty fraud. The decision-making model was developed using Nash game theory to find optimal strategies for both manufacturers and consumers. The study results show that the PRW policy is more effective in reducing warranty fraud committed by consumers. The study also found that consumer behaviour regarding warranty fraud is influenced by various factors, including product reliability, the penalty cost imposed on consumers proven to commit fraud, the cost incurred by manufacturers for inspections, manufacturing costs of batteries, the cost incurred by consumers to purchase new batteries, and the duration of the FRW policy. Consequently, manufacturers can determine warranty policies and inspection strategies to minimize warranty fraud and reduce the warranty cost burden.