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After-sales service competition in a supply chain: Optimization of customer satisfaction level or profit or both?

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  • Kurata, Hisashi
  • Nam, Seong-Hyun

Abstract

For durable consumer products, after-sales services play an important role in customers' purchase decisions. A manufacturer offers basic warranty available to all customers who buy the product, while a retailer offers optional after-sales service that is available only to customers who pay for the option. We explore the interaction of these two after-sales services assuming two customer segments. Formulating five analytical models, we found that after-sales service plans that are determined to maximize profits do not match optimal after-sales service levels that can satisfy customers the most.

Suggested Citation

  • Kurata, Hisashi & Nam, Seong-Hyun, 2010. "After-sales service competition in a supply chain: Optimization of customer satisfaction level or profit or both?," International Journal of Production Economics, Elsevier, vol. 127(1), pages 136-146, September.
    • Handle: RePEc:eee:proeco:v:127:y:2010:i:1:p:136-146
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