Warranty Inventory consists of replacement parts or products kept on hand to fulfill warranty claims or service agreements. This inventory is crucial for maintaining customer satisfaction and brand reputation by ensuring quick and reliable repairs or replacements. Balancing warranty inventory is challenging because it involves uncertain and often sporadic demand. Excessive warranty stock ties up capital and warehouse space, while insufficient stock can lead to service delays and increased costs from expedited shipping or lost customers. Inventory optimization models for warranty inventory use historical claim rates, product reliability data, and lead time considerations to determine optimal stock levels. Integration with after-sales service systems helps predict demand patterns and automate replenishment processes, improving service efficiency and cost control.
