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http://dx.doi.org/10.7469/JKSQM.2012.40.1.039

Economic Evaluation of Early Detection System for Warranty Issues  

Jung, Sung-Hwan (High Tech. Consulting Group, Samsung SDS)
Publication Information
Journal of Korean Society for Quality Management / v.40, no.1, 2012 , pp. 39-48 More about this Journal
Abstract
An early detection system for warranty issues periodically collects customers' claim data and automatically reports alarms about emerging issues based on statistical algorithms. It helps companies to reduce an issue definition time and save the handling cost of warranty claims. This paper provides an evaluation framework to validate the economic effect of an early detection system project. For this purpose, we present economical index of a project with explicit formulas such as ROI(return on investment), PP(payback period), NPV(net present value), PI(profitability index) and IRR(internal rate of return) and analyze the sensitivities of the index according to the variation of project input parameters. The proposed analysis framework is expected to be used for evaluating economic values of various system integration projects.
Keywords
Warranty Claim Issues; Early Detection; Economic Analysis; ROI;
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