Manufacturers must frequently predict the number of future field failures for a product using past field-failure data, especially when an unanticipated failure mode is discovered in the field. Such predictions are needed to quantify future warranty costs and ensure a sufficient number of spare parts will be available to quickly repair failed units. In extreme cases, failure predictions are also needed to decide whether a recall is warranted and, if so, which segments of the product population must be recalled -- such as the units built during a specified period of time or those produced in a particular plant. Using an example of a fictitious company dealing with a failed part, this article will describe statistical methods for making these predictions.
This article is published as Meeker, W.Q., Doganaksoy, N., and Hahn, G.J. (2010), Predicting Problems. Quality Progress 43, November, 52–55. Posted with permission.