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Automobiles have a high degree of mechanical and electrical complexity. However, product complexity has the accompanying effect of requiring high levels of design and process oversight. The net result is a product creation process which is prone to creating failures. These failures typically have their origin in an overall lack of complete understanding of the system in terms of materials, geometries and energy flows. Despite all of the engineering intentions, failures are inevitable, common, and must be dealt with accordingly. In the worst case, if a failure manifests itself into an observable failure the customer may have a negative experience. Therefore, it is imperative that design engineers, suppliers along with reliability professionals be able to assess the design risk. One approach to assess risk is the use of degradation analysis. Degradation analysis often provides more information than failure time data for assessing reliability and predicting the remnant life of a system.

Warranty forecasting of repairable systems is very important for manufacturers of mass produced systems. It is desired to predict the Expected Number of Failures (ENF) after a censoring time using collected failure data before the censoring time. Moreover, systems may be produced with a defective component resulting in extensive warranty costs even after the defective component is detected and replaced with a new design. In this paper, we present a forecasting method to predict the ENF of a repairable system using observed data which is used to calibrate a Generalized Renewal Processes (GRP) model. Manufacturing of products may exhibit different production patterns with different failure statistics through time. For example, vehicles produced in different months may have different failure intensities because of supply chain differences or different skills of production workers, for example.