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Managing a two-echelon supply chain with price, warranty and quality dependent demand

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  • Nikunja Mohan Modak
  • Shibaji Panda
  • Shib Sankar Sana

Abstract

This paper deals with a two-layer supply chain composed of one manufacturer and one retailer for single-type product. The demand function of the end customers depends on quality, warranty, and sales price of the product. The profit functions of the manufacturer and the retailers are maximized under centralized and decentralized approaches. Our study suggests that the joint profit in centralized system is always more than the decentralized system. Finally, the surplus profit in centralized system is shared according to their profits in decentralized system.

Suggested Citation

  • Nikunja Mohan Modak & Shibaji Panda & Shib Sankar Sana, 2015. "Managing a two-echelon supply chain with price, warranty and quality dependent demand," Cogent Business & Management, Taylor & Francis Journals, vol. 2(1), pages 1011014-101, December.
    • Handle: RePEc:taf:oabmxx:v:2:y:2015:i:1:p:1011014
    DOI: 10.1080/23311975.2015.1011014
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    Cited by:

    1. Modak, Nikunja Mohan & Panda, Shibaji & Sana, Shib Sankar, 2016. "Three-echelon supply chain coordination considering duopolistic retailers with perfect quality products," International Journal of Production Economics, Elsevier, vol. 182(C), pages 564-578.
    2. Sher, Mikhail M. & Kim, Seung-Lae & Banerjee, Avijit & Paz, Michael T., 2018. "A supply chain coordination mechanism for common items subject to failure in the electronics, defense, and medical industries," International Journal of Production Economics, Elsevier, vol. 203(C), pages 164-173.
    3. Fang, Chih-Chiang, 2020. "Optimal price and warranty decision for durable products in a competitive duopoly market," Reliability Engineering and System Safety, Elsevier, vol. 203(C).

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