Quality control for a guaranteed product
Abstract The use of a guarantee as a tool for increasing both reliability and payments for achieving it is suggested. It is shown that a guarantee in which the manufacturer agrees to pay a sizeable penalty each time one of his products fails (a penalty-clause guarantee) may be beneficial both to the manufacturer and the user. The quality control problem associated with such guaranteed products is similar to a number of problems in other areas. The use of concepts developed by insurance companies is suggested as an adjunct to conventional quality control testing. Mean values of probability distributions are used to illustrate some of the potentialities of a penalty-clause guaranteed product. References to some of the related efforts that might help in designing quality control tests for guaranteed products are provided.