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Definitions
Reliability
is the probability of a product performing without failure a specified function under given
conditions for a given period of time. - J. M. Juran
Warranty Costs
are all the costs related to product field failures or perceived failures during the warranty period.
Reliability Costs
are all those costs resulting from product field failures or perceived failures from the time of shipment over
the life of the product. They include:
- Cost of customer service communications
- Cost of servicing products that have failed or been perceived to have failed
- Cost of design, manufacturing, and procurement changes made in reaction to failure
information received after the design - and perhaps also a manufacturing run - were completed.
- Last, but definitely not least, the opportunity cost of reduced sales and gross margin growth due to:
- Customers leaving for a competitor's product that they feel may be more reliable
- Prospects never realized due to an absence of a favorable corporate image for product reliability
- Prospects never realized due to their hearing negative comments about a company's product reliability
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