Servicing, Quality Design and Control

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Abstract
Some of the risks associated with manufacturing may be managed by establishing appropriate manufacturing quality levels and assuring them by appropriate inspection and quality control plans. In addition, by providing warranties or post-sales servicing contracts, consumers may be protected from risks of purchasing nonconforming items. The purpose of this paper is to devise a framework whereby management can simultaneously determine the appropriate manufacturing quality, inspection, and post-sales servicing plans. Using a renewal theoretic approach, the framework developed allows the substitution effects of these managerial decision variables to be explored, thereby providing joint policy choices regarding quality control and servicing.