Process: Warranties Flashcards
What is a warranty?
A warranty is an assurance that a business stands by the quality claims of the products they make and provide to the market. Warranty claims are made against goods that have defects arising from an issue in transformation.
The number of claims made against a business on a particular product line or product range will give an indication of problems in the processing. Operations managers need to trace the source of the fault in manufacturing and rectify it.
Under Australian law all businesses must ensure that there are consumer guarantees on products (sometimes referred to as implied warranties) including;
o Products must be of acceptable quality, safe, lasting, with no faults o Look acceptable o Do all the things someone would normally expect them to do
These responsibilities make up the statutory (or implied) warranty that provides consumers with legal protection under the Competition and Consumer Act 2010 (Cth) in Australia.
Retailers and manufacturers must comply with the warranty and may need to provide a replacement product if a consumer is not satisfied. Alternatively, a manufacturer may repair faulty goods with skill and care, using spare parts of a suitable quality and then return it to the customer.
What are ikea warranty period?
25 years - Matress
10 years - Wardrobes
25 years - Kitchens
10 years - Work Chairs
10 years - Sofas and arm chairs
Case Study
There are several reasons why Ikea offers extended warranties to it’s customers including the rise of sales, customers feeling supported, and the brand develops a good image for quality. If customers know there product is ensured for elongated periods of time it is more reasonable to buy ikea’s kitchen set in comparison to that of a competitors, this will create a sudden surge in sales for each department. Moreover, customers can make their purchase in confidence that the product isn’t likely to be faulty if the brand is chancing thousands of dollars, this stress free purchase will likely influence
the customers to refer and recommend ikea products to friends. Additionally, brand image is vital for business longevity without a good reputation customers will avoid the premise which in return lowers profit, by having a great brand reputation it will entice not only returning customers but new buyers who can write new reviews.
