There are several different notions of warranty costs. These include (i) warranty cost per unit, (ii) warranty cost over some interval (for example, product life cycle) and (iii) warranty costs per unit time (warranty cost rate). As mentioned earlier, the warranty costs depend on product reliability and the product usage. Figure 2 is simplified characterisation for determining the warranty cost per unit. Blischke and Murthy (1994) discuss the expected warranty costs for a wide variety of warranty policies.