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Optimal Pricing Strategies in a Product and Service Supply Chain with Extended Warranty Service Competition considering Retailer Fairness Concern
Joint Authors
Zhao, Du
Zhang, Xumei
Ren, Tinghai
Fu, Hong-Yong
Source
Mathematical Problems in Engineering
Issue
Vol. 2019, Issue 2019 (31 Dec. 2019), pp.1-15, 15 p.
Publisher
Hindawi Publishing Corporation
Publication Date
2019-08-27
Country of Publication
Egypt
No. of Pages
15
Main Subjects
Abstract EN
This paper examines optimal pricing in a two-tier product and service supply chain consisting of a manufacturer and a retailer in the context of vertical competition in extended warranty in two cases: one considering the retailer’s fairness concerns and one without considering the retailer’s fairness concerns.
A manufacturer-dominated product and service supply chain game-theoretic model on the Stackelberg model is developed to analyse how the level of vertical competition in extended warranty service and the intensity of a retailer’s fairness concerns influence the optimal pricing of products and extended warranties for the manufacturer and retailer.
This study finds the following: (i) Two parties of the supply chain employ differential pricing strategies for extended warranties when the retailer has fairness concerns.
(ii) Compared to the same pricing strategies for extended warranty service when the retailer has no fairness concerns, the increase of competition intensity of vertical extended warranty service will enlarge the price difference of extended warranty service.
Meanwhile, it is the intensity of fairness concerns that determines the influences of retailer’s fairness concerns on the price difference of extended warranties.
(iii) If no fairness concerns are raised, an increase in the level of vertical competition in extended warranty service would benefit both supply chain parties, rather than hurting their profit.
If the retailer is fair-minded, its fairness utility increases when the intensity of the fairness concerns rises in a reasonable range and decreases when the intensity exceeds the reasonable range, but for the manufacturer, its profits will be damaged as long as the retailer raises fairness concerns.
American Psychological Association (APA)
Zhao, Du& Zhang, Xumei& Ren, Tinghai& Fu, Hong-Yong. 2019. Optimal Pricing Strategies in a Product and Service Supply Chain with Extended Warranty Service Competition considering Retailer Fairness Concern. Mathematical Problems in Engineering،Vol. 2019, no. 2019, pp.1-15.
https://search.emarefa.net/detail/BIM-1197782
Modern Language Association (MLA)
Zhao, Du…[et al.]. Optimal Pricing Strategies in a Product and Service Supply Chain with Extended Warranty Service Competition considering Retailer Fairness Concern. Mathematical Problems in Engineering No. 2019 (2019), pp.1-15.
https://search.emarefa.net/detail/BIM-1197782
American Medical Association (AMA)
Zhao, Du& Zhang, Xumei& Ren, Tinghai& Fu, Hong-Yong. Optimal Pricing Strategies in a Product and Service Supply Chain with Extended Warranty Service Competition considering Retailer Fairness Concern. Mathematical Problems in Engineering. 2019. Vol. 2019, no. 2019, pp.1-15.
https://search.emarefa.net/detail/BIM-1197782
Data Type
Journal Articles
Language
English
Notes
Includes bibliographical references
Record ID
BIM-1197782