Graduate Seminar: Designing Performance Based Warranty Contracts

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GAINESVILLE, FL: Dr. Joseph Hartman, Professor and Chair of Industrial and Systems Engineering, will deliver the ISE Graduate Seminar, “Designing Performance Based Warranty Contracts,” on Thursday, September 13 at 4:05 p.m. in The Florida Gym, room 0245. Dr. Hartman will discuss his joint work with his former Ph.D. student, Dr. Clay Koshnick.

A warranty is a contract between a consumer and manufacturer that guarantees a product will function at a given level of performance over a given period of time. While traditional warranties focus on reliability, in that the product works in its intended manner, a performance based warranty (PBW) guarantees an operational level, such as a car achieving a minimum level of fuel efficiency. We examine these warranties and determine conditions in which a firm can maximize revenue through their offers with the use of dynamic programming.

Joseph C. Hartman is Professor and Chair of Industrial and Systems Engineering at the University of Florida. He received his M.S. (1994) and Ph.D. (1996) in Industrial and Systems Engineering from the Georgia Institute of Technology after receiving his B.S. (1992) in General Engineering from the University of Illinois at Urbana-Champaign. Previously, he served on the Lehigh University faculty for 11 years, including Department Chair. His research and teaching focuses on dynamic optimization with applications in engineering economics, finance, and transportation systems. His work has been supported by numerous companies and the National Science Foundation, including the CAREER award in 1999. He serves as Editor of The Engineering Economist and is author of the textbook Engineering Economy and the Decision-Making Process.