A Study of Electronic Product Supply Chain Decisions Considering Extended Warranty Services and Manufacturer Misreporting Behavior

Rui Chen, Zhen Luo, Haiping Ren (), Xiaoqing Huang and Shixiao Xiao
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Rui Chen: Business School, Jiangxi University of Science and Technology, Nanchang 330013, China
Zhen Luo: Business School, Jiangxi University of Science and Technology, Nanchang 330013, China
Haiping Ren: Teaching Department of Basic Subjects, Jiangxi University of Science and Technology, Nanchang 330013, China
Xiaoqing Huang: Business School, Jiangxi University of Science and Technology, Nanchang 330013, China
Shixiao Xiao: Chengyi College, Jimei University, Xiamen 361021, China

Sustainability, 2024, vol. 16, issue 14, 1-22

Abstract: In the supply chain management of electronic products, asymmetric cost information is a prevalent issue that can lead manufacturer to misreport costs, thereby exacerbating supply chain imbalances. This study focuses on the electronic product supply chain with an extended warranty service, where the manufacturer bears the after-sales responsibility during the extended warranty period. It explores the decision-making (DM) issues within the supply chain under different information environments and power structures. The Stackelberg game theory is employed to solve and analyze these models, and the main findings are as follows: (1) When supply chain information is symmetrical, centralized DM is the best choice. However, in cases where the supply chain adopts decentralized DM, it is more beneficial for the retailer and the supply chain if the retailer assumes the role of DM leader. Additionally, when the retail price sensitivity coefficient is low, the manufacturer will compete with the retailer for DM priority. Conversely, when the retail price sensitivity coefficient is higher, the manufacturer is better off as a follower in DM; (2) When the supply chain information is asymmetric, the manufacturer may engage in misreporting, which benefits the manufacturer but is detrimental to both the supply chain and the retailer. Moreover, if the price sensitivity coefficient is low, the manufacturer should lead the supply chain DM. Otherwise, the retailer should take the lead in supply chain DM. Adopting such a flexible strategy will prove advantageous for all parties involved in the supply chain. (3) The strategy of “reducing the retail price and increasing the extended warranty price” is a favorable strategy for the supply chain.

Keywords: Stackelberg game; extended warranty service; misreporting behavior; after-sales responsibility (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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