ABSTRACT
Real warranty cost is all of the expenses involved in every aspect of actually processing warranty claims. Claims processing includes, as a minimum, the entry, review, and acceptance or denial of warranty claims and the repair or replacement activities that resolve the claims issue, as well as packaging and shipping. In many organizations, this is a labor-intensive, time-consuming process that is prone to questions, delays, and backand-forth communication, and paperwork between departments within a company and between manufacturers, distributors, dealers, and repair centers. Every department, distributor, dealer, repair center, freight carrier, and subcontractor that is in any way involved with performing any aspect of warranty service contributes to the warranty costs. To these costs are added the overhead and consumables of the warranty process and service department. Warranty costs add up quickly and can be significant.
