Papers by Stefanka Chukova
This paper extends previous studies on quantifying the risk of misinforming by introducing mod-el... more This paper extends previous studies on quantifying the risk of misinforming by introducing mod-els, which allow measuring the risk of misinforming in case of competing messages. These mod-els are realistic representation of the market situation, where purchasing decisions are made based on the assessment of all available offers and selecting the one that meets at most the buyer's needs. The paper emphasizes the case of two competing products offered to a group of potential clients and studies the risk of misinforming and its effect on the purchase decisions. In addition, models for the evaluation of the risk of sellers are also proposed.
Issues in Informing Science and Information Technology, 2012
Providing the appropriate information in the right format to the right group of potential custome... more Providing the appropriate information in the right format to the right group of potential customers of a particular product is the natural objective in market segmentation. This paper explores measures for quantifying the risk of misinforming and their usage for market studies, leading to an approach for identifying market clusters. The proposed segmentation is based on the "cost" of the additional information a particular customer needs for the revision of his/her purchase decision, so that his/her initially wrong purchase decision is appropriately corrected. The risk for wrong purchase decision is twofold to buy something that is not perfectly suitable or not to buy something, which is really suitable. Additional, adjusting information may reduce these risks. The cost of this additional information is calculated in a way to minimize the cost for adjusting decision regarding the buyer's tasks over all possible informing scenarios. Further, the cost for additional information is used to define the distance between clients. This distance serves to identify market segments, i.e., clusters of clients with similar information needs.
Issues in Informing Science and Information Technology, 2007
Nowadays the product warranty is considered to be a valuable attribute of the product. It is a to... more Nowadays the product warranty is considered to be a valuable attribute of the product. It is a tool to enforce the competing power of the producer on the market place. There are two types of problems the product warranty addresses. Firstly, warranty deals with the malfunctioning of the product and, secondly, it addresses the information asymmetry, i.e., the misunderstanding and misinterpretation of the features and qualities of the product. The second aspect is of great importance in the light of indirect business communication, as in e-commerce. The aim of this paper is quantifying the risk of misunderstanding caused by information asymmetry and defining an appropriate product warranty policy, which depends on this risk.
Issues in Informing Science and Information Technology, 2013
This study considers the impact of warranty agreement during the process of a new product adoptio... more This study considers the impact of warranty agreement during the process of a new product adoption, mainly its impact on the risk of misinforming, which naturally arises during this process. It addresses the risk of misinforming in the following two phases of the product adoption-acquiring and utilization of the product. In the first phase the warranty of misinforming acts as a promotional tool, while in the second phase it serves mostly as a risk sharing mechanism. The paper investigates the role of warranty of misinforming in an "ideal" case, when the consumer optimizes the purchase decision led by rational assessment of his needs, product's price and some supplementary costs.
Informing Science: The International Journal of an Emerging Transdiscipline, 2016
The following definition of “option” is given in Wikipedia - “In finance, an option is a contract... more The following definition of “option” is given in Wikipedia - “In finance, an option is a contract, which gives the buyer (the owner or holder) the right, but not the obligation, to buy or sell an underlying asset or instrument at a specified strike price on or before a specified date, depending on the form of the option” (“Option,” n.d.). Option as a risk management (mitigation) tool is broadly used in finance and trade. At the same time, it introduces asymmetry in the sense that, probabilistically, it limits the level of losses (e.g., the price of the option) and allows for unlimited gains. In the market of sophisticated devices (as smart phones, tablets, etc.), where technologies are rapidly advancing, customers usually do not have the experience to use all features of the device at the time of the purchase. Due to the lack of appropriate expertise, the risk of misinforming, leading to not purchasing the “right” device is high, but given enough time to learn the capabilities of th...
Proceedings of the 2015 InSITE Conference, 2015
This paper discusses applications of the measures of the risk of misinforming and the role of the... more This paper discusses applications of the measures of the risk of misinforming and the role of the warranty of misinforming in the context of the informing component of Customer Related Management (CRM) issues. This study consists of two parts. Firstly, we propose an approach for customers’ grouping based on their attitude toward assessing product's properties and their expertise on the terminology/domain of the seller’s message describing the product. Also we discuss what the most appropriate personal/group warranty is for each of these group/clusters. A revised version of this paper was published in Informing Science: the International Journal of an Emerging Transdiscipline, Volume 18, 2015
Issues in Informing Science and Information Technology, 2014
In this paper we focus on models and methods for quantifying the risks related to a product purch... more In this paper we focus on models and methods for quantifying the risks related to a product purchase and the impact of product warranty on these risks. There are two risks associated with purchasing a productthe risk of malfunctioning, i.e., the risk of buying a product that is not up to the quality prescribed by its specifications, and the risk of misinforming-the risk of buying a product that is not suitable for the tasks it is aimed for, i.e., misunderstanding the features of the product while deciding whether to buy it. The later risk is caused by the information asymmetry, which is a natural property of any communication process. Warranty is the usual sharing mechanism of these risks between the manufacturer/ vendor and clients. In this paper we review the ideas related to quantifying the risk of misinforming and discuss the role of the warranty of misinforming. We conclude our overview by outlining several possible directions for future research.
Issues in Informing Science and Information Technology, 2006
The problem of enhancing success in e-Commerce requires reducing or sharing the risk of misinform... more The problem of enhancing success in e-Commerce requires reducing or sharing the risk of misinforming. The objectives of this paper is to raise and discuss the difficulties in quantifying the risk of misunderstanding caused by information asymmetry in a communication process; and to propose a mathematical model, developed to measure the risk of misinforming. Usage of warranty, as the most popular tool of sharing risk, is discussed in the light of risks of misinforming. A data set collected in an experiment, was used to illustrate the major ideas proposed as well as to stress on the fact that in particular circumstances this kind of risk is not understood by clients, which often leads to wrong decisions.
Proceedings of the 2009 InSITE Conference, 2009
This paper extends previous studies on quantifying the risk of misinforming by introducing models... more This paper extends previous studies on quantifying the risk of misinforming by introducing models, which allow measuring the risk of misinforming in case of competing messages. These models are realistic representation of the market situation, where purchasing decisions are made based on the assessment of all available offers and selecting the one that meets at most the buyer's needs. The paper emphasizes the case of two competing products offered to a group of potential clients and studies the risk of misinforming and its effect on the purchase decisions. In addition, models for the evaluation of the risk of sellers are also proposed.
Journal of Applied Mathematics and Decision Sciences, 2009
A product warranty is an agreement offered by a producer to a consumer to replace or repair a fau... more A product warranty is an agreement offered by a producer to a consumer to replace or repair a faulty item, or to partially or fully reimburse the consumer in the event of a failure. Warranties are very widespread and serve many purposes, including protection for producer, seller, and consumer. They are used as signals of quality and as elements of marketing strategies. In this study we review the notion of an online convex optimization algorithm and its variations, and apply it in warranty context. We introduce a class of profit functions, which are functions of warranty, and use it to formulate the problem of maximizing the company's profit over time as an online convex optimization problem. We use this formulation to present an approach to setting the warranty based on an online algorithm with low regret. Under a dynamic environment, this algorithm provides a warranty strategy for the company that maximises its profit over time.
Science of the Total Environment, 2018
Asia Pacific Journal of Operational Research
The articles of this volume will be reviewed individually.
The International Journal of Advanced Manufacturing Technology, 2014
This paper develops an optimization model to investigate the lengths of the optimal burn-in and w... more This paper develops an optimization model to investigate the lengths of the optimal burn-in and warranty period, so that the mean of total product servicing cost is minimised. It is assumed that the cost of a minimal repair to a component at age t is a continuous non-decreasing function of t. Moreover, we model the customer dissatisfaction with product failures after the warranty within the product useful lifetime by introducing a post-warranty failure penalty cost to the manufacturer. The properties of the optimal burn-in time and optimal warranty policy are also analysed. Finally, under different product lifetime distributions, numerical examples and sensitivity analysis with respects to the values of the model parameters are provided.
ABSTRACT This article deals with a type of truncation that occurs with typical automotive warrant... more ABSTRACT This article deals with a type of truncation that occurs with typical automotive warranties. Warranty coverage and the resulting claims data are limited by mileage as well as age. Age is known for all sold vehicles all the time, but mileage is only observed for a vehicle with a claim and only at the time of the claim. Here we deal with the univariate case, taking either age or mileage as the usage measure. We evaluate the mean cumulative number of claims or cost of claims and its standard error as functions of the usage measure. Within a nonparametric framework, we extend the usual methods in order to account for the fact that the odometer readings are available only for a vehicle with a claim and only at the time of the claim. We illustrate the ideas with real data on four cases based on whether the usage measure is age or miles and whether the results are adjusted for withdrawals from warranty coverage. We also note that these adjustments can be further refined by taking into account the effects of reporting delay.
Most of the reliability literature on modeling the effect of repairs on systems assumes the failu... more Most of the reliability literature on modeling the effect of repairs on systems assumes the failure rate functions are monotonically increasing. For systems with non-monotonic failure rate functions, most models deal with minimal repairs (which do not affect the working condition of the system) or replacements (which return the working condition to that of a new and identical system). We explore a new approach to model repairs of a system with a non-monotonic failure rate function; in particular, we consider systems with a bathtub-shaped failure rate function. We propose a repair model specified in terms of modifications to the virtual age function of the system, while preserving the usual definitions of the types of repair (minimal, imperfect and perfect repairs) and distinguishing between perfect repair and replacement. In addition, we provide a numerical illustration of the proposed repair model.
Journal of the Operational Research Society
The objective of this study is to develop a warranty servicing strategy, based on imperfect and m... more The objective of this study is to develop a warranty servicing strategy, based on imperfect and minimal repairs, that minimises the total warranty servicing cost. For pre-specified degrees of repair, the expected warranty servicing cost is minimised by optimally partitioning a two-dimensional rectangular warranty region into n disjoint subregions. We numerically illustrate the imperfect repair strategy and provide a comparison with previously studied warranty repair strategies. Journal of the Operational Research Society (2012) 63, 846-859. doi:10.1057/jors.2011.66 Published online 10 August 2011
The cost of servicing a warranty depends, amongst other factors, on the type of repair performed ... more The cost of servicing a warranty depends, amongst other factors, on the type of repair performed under warranty. Although ''all minimal repair'' and ''all replacement'' policies are easy to implement and analyze, they are not always feasible and/or practical. Having a combination of different types of repair often leads to lower warranty servicing costs. In this article, to reduce the warranty servicing cost, we study a servicing strategy that involves performing imperfect repairs in place of some of the minimal repairs of an ''all minimal repair'' strategy; the effect of an imperfect repair is characterized by a drop in the conditional intensity function of the failure process. We consider both fixed and random degrees of repair. For a given type of product, we partition the warranty region so that the expected total warranty servicing cost is minimized. We provide a numerical illustration and a comparison with previously-studied repair-replacement strategies.
In this paper a replacement-repair model is developed to study a renewing free replacement warran... more In this paper a replacement-repair model is developed to study a renewing free replacement warranty (RFRW) for a class of multi-state deteriorating repairable products. After a replacement, the product warranty is renewed. Two parameters affect the manufacturer's ...
Asia-Pacific Journal of Operational Research, 2009
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Papers by Stefanka Chukova