Design of Extended Warranties in Supply Chains under Additive Demand

• 成果类型: Article
• 署名作者: Li, Kunpeng; Mallik, Suman; Chhajed, Dilip
• 署名单位: Texas State University System; Sam Houston State University; University of Kansas; University of Illinois System; University of Illinois Urbana-Champaign
• 刊物名称: PRODUCTION AND OPERATIONS MANAGEMENT
• ISSN/ISSBN: 1059-1478
• DOI: 10.1111/j.1937-5956.2011.01300.x
• 发表日期: 2012
• 页码: 730-746
• 关键词: extended warranty; Supply chain management; warranty; game theory

摘要

We study the design of extended warranties in a supply chain consisting of a manufacturer and an independent retailer. The manufacturer produces a single product and sells it exclusively through the retailer. The extended warranty can be offered either by the manufacturer or by the retailer. The party offering the extended warranty decides on the terms of the policy in its best interest and incurs the repair costs of product failures. We use game theoretic models to answer the following questions. Which scenario leads to a higher supply-chain profit, the retailer offering the extended warranty or the manufacturer? How do the optimum price and extended warranty length vary under different scenarios? We find that, depending on the parameters, either party may provide better extended warranty policies and generate more system profit. We also compare these two decentralized models with a centralized system where a single party manufactures the product, sells it to the consumer, and offers the extended warranty. We also consider an extension of our basic model where either the manufacturer or the retailer resells the extended warranty policies of a third party (e.g., an independent insurance company), instead of offering its own policy.