Impacts of inspection errors and warranty costs on a complex product supply chain under different development modes

Huan Wang, Daao Wang, Zhigeng Fang and Xiao-Jun Zeng

International Journal of Production Economics, 2024, vol. 272, issue C

Abstract: With the increasing competition in the complex product industry, discussions regarding quality and price decision-making within the supply chain have become widespread. Nevertheless, as product development modes evolve, the influence of inspection errors and warranty costs on a complex product supply chain has received limited attention. In this paper, we apply a nonlinear demand function and develop game models to depict the quality and price decision problem in a complex product supply chain. We derive equilibrium decisions under two distinct product development modes, the traditional mode and the customized mode, with detailed analyses. Furthermore, numerical studies are conducted to illustrate how equilibrium decisions fluctuate in response to inspection errors, warranty costs and uncertain demand, yielding interesting findings. We also explore the impact of information asymmetry. Ultimately, significant insights and implications are put forward.

Keywords: Complex product; Supply chain; Quality and price; Inspection errors; Warranty costs; Customized development mode (search for similar items in EconPapers)
Date: 2024
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:proeco:v:272:y:2024:i:c:s0925527324000860

DOI: 10.1016/j.ijpe.2024.109229

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