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Pricing Decisions and Provider Choice on Extended Warranty Service in Supply Chain

Author

Listed:
  • Rong Zhang

    (Shanghai Maritime University, Shanghai, China)

  • Mengjiao Li

    (Shanghai Maritime University, Shanghai, China)

  • Bin Liu

    (Shanghai Maritime University, Shanghai, China)

Abstract

This article constructed a manufacturer-leading supply chain system considering the extended warranty service (EW) with a single manufacturer and a single retailer to study the influence of service cost on the choice of the EW provider. First, this article analyzed retail pricing, EW pricing, EW quality, the manufacturer's profit, the retail's profit and the total system profit in Model M and Model R. Then, the article analyzed the influence of service cost on the choice of the EW provider. Finally, it shows that if only part of consumers purchases the product with the EW, the manufacturer benefits from EW provided by the retailer. However, the retailer has to balance the ratio of the service cost coefficient. Furthermore, all consumers purchase the product with the EW, both the manufacturer and the retailer has to balance the ratio of service cost coefficient between manufacturer and retailer.

Suggested Citation

  • Rong Zhang & Mengjiao Li & Bin Liu, 2019. "Pricing Decisions and Provider Choice on Extended Warranty Service in Supply Chain," International Journal of Information Systems and Supply Chain Management (IJISSCM), IGI Global, vol. 12(4), pages 55-71, October.
    • Handle: RePEc:igg:jisscm:v:12:y:2019:i:4:p:55-71
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    Cited by:

    1. Syed Asif Raza, 2022. "A bibliometric analysis of pricing models in supply chain," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 21(2), pages 228-251, April.

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