TITLE:
Supply Chain Coordination for Strong Retailer with Extended Warranty under Network Externality
AUTHORS:
Yan-Fei Tan, Yu-Yin Yi, Jun-Jiang Yao
KEYWORDS:
Extended Warranty, Network Externality, Contract Coordination, Game Model, Two-Part Tariff
JOURNAL NAME:
Journal of Service Science and Management,
Vol.8 No.3,
June
26,
2015
ABSTRACT: This paper constructed a retailer-leading supply chain system considering the extended warranty (EW) with single manufacturer and single retailer to study the influence of network externality on retailer-leading supply chain coordination. First of all, we analyzed and compared the retail price, EW price, EW quality, and the total system profit in centralized and decentralized model respectively. Then we analyzed the influence of network externality on decision variables and system profits. We found that the network externality increased the loss of decision efficiency. After that, we considered the coordination of the supply chain system with extended warranty. Finally, some numerical examples were presented for further analysis.