EMPERIOStrategy & Research Lab
Case room

Test warranty language with Ludhiana dealers

Before the decision

Dealers submit fewer cards when installation work is concentrated on Saturdays. Retailers want a faster form while the service team needs serial numbers that can be matched to an invoice. Completion counts alone do not tell the firm which form makes claims easier.

The problem

Should the team choose Simplified registration or Current paperwork for the next 12 months?

Decision owner: The business unit lead.

Registrations could rise because dealers find the form easier rather than because claims fall.

Option economics

Scroll the table to see all figures.

Simulated inputs for 12 months
OptionVolume (valid registrations)₹ per unitFixed costNet contribution
Simplified registration57,00049₹23.5 lakh₹4.43 lakh
Current paperwork43,00058₹19.5 lakh₹5.44 lakh

Make the call

  1. Calculate net contribution for Simplified registration and Current paperwork. Which assumption makes the comparison most fragile?
  2. If the leading option delivers 10% fewer valid registrations, does your recommendation change?
  3. What evidence would you ask for before the team makes an irreversible commitment?
Reveal the worked solution

Start by validating Current paperwork. It contributes ₹5.44 lakh after fixed costs and leads by ₹1.01 lakh. Treat that gap as the amount of unmodelled cost or lost contribution the option can absorb before the ranking reverses.

  1. Frame the decision

    Specify the eligible population and the outcome before collecting data. Treat the figures as planning estimates. Use comparable groups to measure the effect before rollout.

  2. Calculate both options

    Simplified registration: 57,000 valid registrations × ₹49 less ₹23.5 lakh in fixed costs gives ₹4.43 lakh. Current paperwork: 43,000 valid registrations × ₹58 less ₹19.5 lakh in fixed costs gives ₹5.44 lakh.

  3. Stress-test the forecast

    Current paperwork leads by ₹1.01 lakh in the base case. If Current paperwork delivers 10% fewer valid registrations (38,700) at the same margin and fixed cost, it contributes ₹2.95 lakh. Holding the other option constant, the stressed result falls behind. This isolates volume risk. Check whether both options would respond to the same change in demand.

  4. Set a decision threshold

    Holding the other option’s result fixed, Current paperwork needs at least 41,259 valid registrations to match or beat it under the model. Compare verified registrations and resolved claims, and sample for duplicate devices.

Registrations could rise because dealers find the form easier rather than because claims fall. Compare the cost of a limited test with the loss the business would face if the full commitment failed. Ask the team to agree the decision criterion before collecting more evidence.

What if the whole market moves?

The worked solution tests a change to one option at a time. Here, both options gain or lose the same percentage of volume. Unit contribution and fixed costs stay constant.

Simulated contribution after fixed costs
Volume scenarioSimplified registrationCurrent paperworkHigher contribution
Both lose 10% of volume₹1.64 lakh₹2.95 lakhCurrent paperwork
Base assumptions₹4.43 lakh₹5.44 lakhCurrent paperwork
Both gain 10% of volume₹7.22 lakh₹7.93 lakhCurrent paperwork

Explain which option you would take forward. Check whether capacity, price or customer mix would also change as the market moves.

Review the underlying lesson

Study the research design