Sigma Magic Help Version 19

Warranty Analysis

Overview

It's the study of how and when products fail under warranty, typically using statistical models. It uses field return data (i.e., actual failures reported by customers) to draw insights about reliability and risk. Why It Matters:

• Manufacturers want to reduce warranty claims (which cost money).
• Engineers use warranty data to find and fix design or manufacturing issues.
• Business teams use it to set cost-effective warranty periods and service plans.

This tool can be added to your active workbook by clicking on Stats and then selecting Warranty Analysis.

Inputs

Click on Analysis Setup to open the menu options for this tool.

Setup

A sample screenshot of the setup menu is shown below.

1	Data Type: Specify the type of format used to specify the warranty data. Currently, only the Nevada format for data entry is available. The Nevada Format is a tabular data layout where each row represents a batch (or group) of units shipped, with the number of failures recorded over time. The first column contains the month of shipment, the second column contains the number of units shipped that month and subsequent time periods represents the number of failures in each time period.
2	Num Rows: Specify the number of months of data you want to use for analysis. You can pick from 2 to 100 months for this analysis.
3	Warranty Duration: Specify the number of months for the warranty period. Make sure that this number entered is an integer.
4	Warranty Cost: Specify the cost of warranty repair for a single unit. This could be the cost to repair or replace the unit that has failed. This number must be numeric.
5	Method: Specify the method to use for warranty analysis. Currently, the only method available is Maximum Likelihood Estimates (MLE).
6	Distribution: Specify the distribution to use for warranty analysis. Currently, the only distribution available is the Weibull distribution.
7	Help Button: Click on this button to open the help file for this topic.
8	Cancel Button: Click on this button to discard any changes and close the dialog box.
9	Create Button: If this is your first time using this template, click this button to format the worksheet template. You can also update the worksheet format any time, but remember that you may lose any data entered on this worksheet. Once you are happy with the worksheet template layout, you must enter any required data on the worksheet. When the data entered into the worksheet is complete, you can click on Analysis Setup and then Compute Outputs to generate analysis results.
10	Analyze Button: Click on this button to save all changes and compute the outputs for this analysis. Review the results of your analysis and make changes to your inputs if required to update analysis results.

Data

You will see the following dialog box if you click the Data button. Here, you can specify the data required for this analysis.

1	Search Data: The available data displays all the columns of data that are available for analysis. You can use the search bar to filter this list and speed up the search for the right data for analysis. Enter a few characters in the search field, and the software will filter and display the filtered data in the Available Data box.
2	Available Data: The available data box contains the list of data available for analysis. The information displayed in this box includes the row number, whether the data is Numeric (N) or Text (T), and the name of the column variable. Note that the software displays data from all the tables in the current workbook. Even though data within the same table have unique column names, columns across different tables can have similar names. Hence, it is crucial that you not only specify the column name but also the table name.
3	Add or View Data: Click on this button to add more data to your workbook for analysis or to view more details about the data listed in the available data box. When you click on this button, it opens the Data Editor dialog box, where you can import more data into your workbook. You can also switch from the list view to a table view to see the individual data values for each column.
4	Sales Data: Select the column that contains sales data. To select a column, click on the columns in the Available Data to highlight them and then click on the Select Button. A second method to choose the data is to double-click on the columns in the list of Available Data. Finally, you can drag and drop the columns you are interested in by holding down the select columns using your left mouse key and dragging and dropping them in one of the boxes on the right. You can enter up to one numeric column for this analysis.
5	Failure Data: Select the column that contains returns data. To select a column, click on the columns in the Available Data to highlight them and then click on the Select Button. A second method to choose the data is to double-click on the columns in the list of Available Data. Finally, you can drag and drop the columns you are interested in by holding down the select columns using your left mouse key and dragging and dropping them in one of the boxes on the right. You can enter up to number of rows minus one numeric columns for this analysis.
6	View Selection: Click on this button to view the data specified for this analysis. The data can be viewed in a tabular format or a graphical summary.

Charts

You will see the following dialog box if you click the Charts button.

0	Pick Charts: Select the charts you would like to display for this analysis.
1	Title: The system will automatically pick a title for your chart. However, if you want to override that with your title, you can specify a title for your chart here. Note that this input is optional.
2	Sub Title: The system will automatically pick a subtitle for your chart. However, if you want to override that with your subtitle, specify a subtitle for your chart here. Note that this input is optional.
3	X Label: The system will automatically pick a label for the x-axis. However, if you would like to override that with your label for the x-axis, you can specify a different label here. Note that this input is optional.
4	Y Label: The system will automatically pick a label for the y-axis. However, if you would like to override that with your label for the y-axis, you can specify a different label here. Note that this input is optional.
5	X Axis: The system will automatically pick a scale for the x-axis. However, if you would like to override that with your values for the x-axis, you can specify them here. The format for this input is to determine the minimum, increment, and maximum values separated by a semi-colon. For example, if you specify 10 and 20, the minimum x-axis scale is set at 10, and the maximum x-axis scale is set at 20. If you specify 10;2;20, then, in addition to minimum and maximum values, the x-axis increment is set at 2. Note that this input is optional.
6	Y Axis: The system will automatically pick a scale for the y-axis. However, if you would like to override that with your values for the y-axis, you can specify them here. The format for this input is to determine the minimum, increment, and maximum values separated by a semi-colon. For example, if you specify 10;20, the minimum y-axis scale is set at 10 and the maximum y-axis scale is set at 20. If you specify 10;2;20, then, in addition to minimum and maximum values, the y-axis increment is set at 2. Note that this input is optional.
7	Horizontal Lines: You can specify the values here if you want to add a few extra horizontal reference lines on top of your chart. The format for this input is numeric values separated by semi-colon. For example, if you specify 12;15, two horizontal lines are plotted at Y = 12 and Y = 15, respectively. Note that this input is optional.
8	Vertical Lines: You can specify the values here if you want to add a few extra vertical reference lines on top of your chart. The format for this input is numeric values separated by semi-colon. For example, if you specify 2;5, two vertical lines are plotted at X = 2 and X = 5, respectively. Note that this input is optional.

Optional Chart Formating

If a chart has already been created earlier and you have made any changes to the chart format directly on the chart, it is possible to copy the settings and save them to memory. The next time you regenerate the chart, the same settings will be applied by the software, and you won't have to reapply them manually. The following image appears in the Charts tab if a valid chart exists on the worksheet. If no charts are found on the worksheet, the image shown below is hidden and will not appear in your dialog box.

1	Copy Format: Click on this button to copy the chart settings to memory. The chart settings will be saved and reapplied the next time you regenerate the chart.
2	Clear Format: Click on this button to clear any existing settings you have made to the chart. The default software settings will be applied to your chart.

Verify

If you click the Verify button, the software will perform some checks on the data you entered. A sample screenshot of the dialog box is shown in the figure below. The software checks if you have correctly specified the input options and entered the required data on the worksheet. The results of the analysis checks are listed on the right. If the checks are passed, they are shown as green-colored checkmarks. If the verification checks fail, they are shown as a red-colored cross. If the verification checks result in a warning, they are shown in the orange exclamation mark. Finally, any checks that are required to be performed by the user are shown as blue info icons.

1	Item: The left-hand side shows the major tabs and the items checked within each section
2	Status: The right-hand side shows the status of the checks.
3	Overall Status: The overall status of all the checks for the given analysis is shown here. The overall status check shows a green thumps-up sign if everything is okay and a red thumps-down sign if any checks have not passed. Note that you cannot proceed with generating analysis results for some analyses if the overall status is not okay.

Click on the Create Button to reformat the worksheet in Nevada format. If you have already specified data in the dialog box, they will be automatically imported into your worksheet. If not, you will need to manually specify the data on the worksheet.

Worksheet

A sample worksheet layout is shown in the figure below. The first column contains the month number, the second column contains the sales units in each month. The third through the (n-1)th column specifies the returns data that impacts the warranty costs. For example, the first month we generated 100 units of sales units. In the second month, there were 10 returns. In the third month, we had 5 returns. In the fourth month, we had 4 returns, and in the fifth month, we had 3 returns. Similarly, data is specified for sales and returns generated for units sold in the 2nd month and so on.

Once all the data is entered, you are now ready to perform the analysis. You can either click on Compute Outputs to generate analysis results.

Outputs

A sample screenshot of the worksheet is shown below. The outputs area contains a summary of the inputs, specifically, the warranty duration, warranty cost, and the distribution used for analysis. The assumptions check verifies if the sample size is sufficient for this analysis or if there are any errors in the data specified for analysis. There is also a check to report if there are any errors generated by the Maximum Likelihood Estimate (MLE) method. If there are errors in fitting the best parameters, your analysis results may be suspect.The analysis results section reports the distribution parameters that was fit to the given data. The warranty metrics reports the claim rate, failure rate, and the warranty cost per unit. You can use this data to determine what warranty plan you want to roll-out for your product or service.

The graph shows the survival data, which you can relate to the survival probability for different failure times. The time period at which 50% of your products fails is also reported in the subtitle.

Examples

The following examples are in the Examples folder.

• For the failure data given in the reference file, perform a warranty analysis for a product for 1 year. (Warranty 1.xlsx). What is the break-even costs we need to consider for the product to cover these warranty costs?

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