Service and Price Decisions of a Supply Chain with Optional After-Sale Service

Xiaochen Sun, Qingshuai Zhang and Yancong Zhou

Mathematical Problems in Engineering, 2016, vol. 2016, 1-11

Abstract:

For durable products, the high quality after-sales service has been playing an increasingly important role in consumers’ purchase behaviors. We mainly study a supply chain composed of a manufacturer and a retailer. In a process of products sales, the manufacturer will provide a basic free quality assurance service. On this basis, the retailer provides paid optional quality assurance service to consumers to promote sales. Users are divided into two categories in this paper: users with no optional service and users with optional services. We derive the equilibrium decisions between the manufacturer and the retailer under the following two cases: (i) the optional after-sales service level and the wholesale price determined by the manufacturer and the retail price determined by the retailer; (ii) the wholesale price determined by the manufacturer and the optional after-sales service level and the retail price determined by the retailer.

Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:hin:jnlmpe:1505817

DOI: 10.1155/2016/1505817

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