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SUMMARY:MTEI Seminar by Prof. Bezalel Gavish\, Cox School of Business
DTSTART:20150216T120000
DTEND:20150216T133000
DTSTAMP:20260916T064634Z
UID:5e73881a83111f8ceb1f2f4e23b1fbd3753005b5de3e62f84f4ac4b1
CATEGORIES:Conferences - Seminars
DESCRIPTION:Prof. Bezalel Gavish\, Cox School of Business\n"Warranty Polic
 y Impact on Net Revenues as a Function of Part Replacements and Optional P
 urchases"Abstract\nRetailer outlets spend significant resources to attract
  existing and new customers to their stores. Warranty policies that requir
 e the customer to return to store in which part replacements or repairs ar
 e performed can induce customers to purchase additional items while the re
 pairs are performed. Such optional purchases can reduce the marketing budg
 ets and/or increase the revenues to the retailers. The benefits of appropr
 iate policies could include purchase of upgrades\, additional related prod
 ucts\, snacks and merchandise from different parts of the store\, which wi
 ll be made while the customer is waiting for the service or replacement. 
  These benefits have not been studied in depth as most articles on warrant
 ies have focused on minimizing replacement costs.  We identified two type
 s of replacement patterns which have not been compared in conjunction with
  costs of replacement and returns from additional sales generated by retur
 n to the store to utilize the warranty.  One is the case of products that
  gradually wears out (i.e. tires\, belts and batteries)\, versus products 
 that have a high failure rate in the initial period and lower rates of det
 erioration in subsequent periods show.  An example of this type of produc
 t may be TV sets\, complex electronic components and cellular phones.\nAna
 lytic models are developed for the different types of products. Using simu
 lations which include marginal revenues from original sales and warranty u
 tilization\, we show that as more visits are made to replace parts higher 
 revenues are gained from additional sales\, marginal revenue from added sa
 les increase in positive linear fashion.  As the reimbursement rate incre
 ases mean net revenues per period decrease but by less than the reimbursem
 ent amount.  Cut-off points can be set for expected mean net revenues usi
 ng reimbursement decline rates and varying amounts of marginal revenue.
LOCATION:ODY 4.03\, VIP Room http://plan.epfl.ch/?zoom=19&recenter_y=58638
 00.12869&recenter_x=731560.22521&layerNodes=fonds\,batiments\,labels\,info
 rmation\,parkings_publics\,arrets_metro\,transports_publics&floor=4&q=ody_
 4.03
STATUS:CONFIRMED
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