Korespondensi: Cost Analysis of Lemon Law Warranties for Used Equipments

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Korespondensi: Cost Analysis of Lemon Law Warranties for Used Equipments

Abstract

This paper deals with a warranty policy for a repairable used equipment where it is protected by lemon laws during the warranty period. Under the lemon law warranty considered, a lemon is declared when one of the two conditions occurs: (i) the equipment has been returned to the dealer k (e.g. k=3) times to have the same problem fixed, but the dealer was unable to repair the problem satisfactorily, or (ii) the used equipment has been out of service more than d (e.g. d=30) days due to one or more defects. If the used product turns to be a lemon, then two cases are studied – (i) refund and (ii) replacement cases. For (i), the dealer will refund the purchase price, and replace with a new one with a new warranty for (ii). We give numerical examples to illustrate the expected warranty servicing cost and the risk of the warranty cost exceeding a limit cost for each cases under various different condition and some guidelines for the dealer related to the lemon laws.

Statement of Responsibility

Author(s)

Hennie Husniah - Personal Name
R. Wangsaputra - Personal Name
Bermawi P. Iskandar - Personal Name

Edition

Call Number

658 HEN c

Subject(s)

warranty
expected warranty cost
Lemon laws
used equipment
refund
replacement

Classification

600

Series Title

GMD

Text

Language

English

Publisher

Publishing Year

2020

Publishing Place

Specific Detail Info

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APA Citation

Hennie Husniah. (2020).Korespondensi: Cost Analysis of Lemon Law Warranties for Used Equipments.(Electronic Thesis or Dissertation). Retrieved from https://localhost/etd