Return of products within the warranty coverage induces additional cost and loss of reputation to manufacturers. It is of practical interest to predict the return rate by experimental means before introducing a product to the market. In this paper, we propose to optimize accelerated reliability tests to achieve the goal within limited time. To describe the heterogeneity in the customers’ usage mode, a discrete random variable is employed to model the degradation rate in addition to the continuous stress variable. To further characterize the heterogeneity in the customers’ behavior, two models of product return are investigated: one assumes that customers return products once the degradation level reaches the minimum eligible return threshold and the other assumes that the threshold varies among different customers. Optimal reliability tests are planned under the large-sample assumption with two novel test schemes: global optimal planning and stress constrained planning. Insights regarding the optimal plans are gleaned to ameliorate the test planning procedure and verify the optimality. A real example from the battery industry is then presented along with the simulation study and sensitivity analysis to demonstrate the methods. We find that the randomness in return level results in different test plans. Furthermore, the constrained optimal plans offer more robustness to the compromise plans.

Nowadays, fierce competition and increasing customer requirements force manufacturers to continuously provide better after-sales services and supports. One such kind of after-sales services is product warranty which has been offered for almost all products in today's market. In this paper, we study a new warranty policy, called piece-wise renewing free replacement warranty. Under this policy, the whole warranty period is divided into two sub-periods and once an item fails in a specific sub-period, it will be replaced by a new identical one and the warranty period is fully or partially renewed. The expected warranty cost and warranty cycle of this policy are derived from the manufacturer's perspective. The proposed model is then modified by involving three sub-periods and a failure limit, respectively. In the latter scenario, when the number of item failures over a warranty cycle exceeds a pre-specified threshold, the manufacturer has to refund the item's purchase price, and consequently the warranty ceases. A real-world case study is presented using warranty data of a battery manufacturer. It is found that for a given warranty period, the piece-wise renewing free replacement policy has a better performance than traditional fully renewing policy, in terms of expected warranty cost, warranty cycle, and cost rate.