scholarly journals Optimal Pricing Strategies in a Product and Service Supply Chain with Extended Warranty Service Competition considering Retailer Fairness Concern

2019 ◽  
Vol 2019 ◽  
pp. 1-15 ◽  
Author(s):  
Du Zhao ◽  
Xumei Zhang ◽  
Tinghai Ren ◽  
Hongyong Fu
Keyword(s):  
Supply Chain ◽  
Optimal Pricing ◽  
Pricing Strategies ◽  
Price Difference ◽  
Extended Warranty ◽  
Service Supply Chain ◽  
Reasonable Range ◽  
Fairness Concerns ◽  
Extended Warranties ◽  
Warranty Service

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.

scholarly journals Effects of channel encroachment on the software and service decisions in it supply chains

2021 ◽  
Vol 0 (0) ◽  
pp. 0
Author(s):  
Tinghai Ren ◽  
Nengmin Zeng ◽  
Dafei Wang ◽  
Shuwei Cheng
Keyword(s):  
Supply Chain ◽  
Service Quality ◽  
High Price ◽  
Software Developers ◽  
Sales Price ◽  
Software Developer ◽  
It Service ◽  
Extended Warranty ◽  
Service Supply Chain ◽  
Intensity Of Competition

<p style='text-indent:20px;'>Currently, many upstream software developers not only sell software through downstream service providers, but also directly sell it to clients. However, in the field of IT service supply chain management, there is a lack of research on the channel encroachment of software developers. In this study, we consider an IT service supply chain with a software developer, a service provider and client enterprises. Clients can either purchase the software (developed by the software developer) from the provider with a high price and additional pre-sale services, or directly purchase it from the developer with a low price but without pre-sale service. After purchasing the software, the clients can also purchase the extended warranty service from the developer. The study shows that the market size occupied by the developer and the intensity of competition between the two parties will neither affect the developer's product and service pricing decisions, nor influence the total demand for software products and extended warranty services, and thus will not impact his own profit. However, these factors will impact the provider's decisions for pre-sale service quality and software sales price, thereby affecting the provider's software demand and profit, and thus impact the performance of the supply chain. In addition, as the intensity of competition between both parties increases, the provider will simultaneously choose to reduce the pre-sales service quality and the software sales price to compete with the developer. Different from conclusions of the existing research on competition, we surprisingly observe that as the sensitivity of client enterprises to the extended warranty services price increases, both parties will increase the software price to compete. The encroachment of the developer will reduce the provider's software demand and profit, and thus lead to a decline in the performance of the supply chain. Therefore, the encroachment of the developer is an act of squeezing out partners by decreasing the profit of the provider, but without affecting his own profit.</p>

Pricing Decisions and Provider Choice on Extended Warranty Service in Supply Chain

2019 ◽  
Vol 12 (4) ◽  
pp. 55-71 ◽  
Author(s):  
Rong Zhang ◽  
Mengjiao Li ◽  
Bin Liu
Keyword(s):  
Supply Chain ◽  
Total System ◽  
Service Cost ◽  
Supply Chain System ◽  
Provider Choice ◽  
Retail Pricing ◽  
Pricing Decisions ◽  
Extended Warranty ◽  
Cost Coefficient ◽  
Warranty Service

This article constructed a manufacturer-leading supply chain system considering the extended warranty service (EW) with a single manufacturer and a single retailer to study the influence of service cost on the choice of the EW provider. First, this article analyzed retail pricing, EW pricing, EW quality, the manufacturer's profit, the retail's profit and the total system profit in Model M and Model R. Then, the article analyzed the influence of service cost on the choice of the EW provider. Finally, it shows that if only part of consumers purchases the product with the EW, the manufacturer benefits from EW provided by the retailer. However, the retailer has to balance the ratio of the service cost coefficient. Furthermore, all consumers purchase the product with the EW, both the manufacturer and the retailer has to balance the ratio of service cost coefficient between manufacturer and retailer.

scholarly journals Risk-Averse Suppliers’ Optimal Pricing Strategies in a Two-Stage Supply Chain

2013 ◽  
Vol 2013 ◽  
pp. 1-11 ◽  
Author(s):  
Rui Shen ◽  
Zhiqing Meng ◽  
Xinsheng Xu ◽  
Min Jiang
Keyword(s):  
Supply Chain ◽  
Loss Function ◽  
Wholesale Price ◽  
Competitive Environment ◽  
Optimal Pricing ◽  
Risk Averse ◽  
Pricing Strategies ◽  
Two Stage ◽  
Future Loss

Risk-averse suppliers’ optimal pricing strategies in two-stage supply chains under competitive environment are discussed. The suppliers in this paper focus more on losses as compared to profits, and they care their long-term relationship with their customers. We introduce for the suppliers a loss function, which covers both current loss and future loss. The optimal wholesale price is solved under situations of risk neutral, risk averse, and a combination of minimizing loss and controlling risk, respectively. Besides, some properties of and relations among these optimal wholesale prices are given as well. A numerical example is given to illustrate the performance of the proposed method.

scholarly journals The Impact of Price Comparison Service on Pricing Strategy in a Dual-Channel Supply Chain

2013 ◽  
Vol 2013 ◽  
pp. 1-13 ◽  
Author(s):  
Qi Xu ◽  
Zheng Liu ◽  
Bin Shen
Keyword(s):  
Supply Chain ◽  
Numerical Study ◽  
Profit Maximization ◽  
Pricing Strategy ◽  
Optimal Pricing ◽  
Pricing Strategies ◽  
Price Comparison ◽  
Dual Channel ◽  
Dual Channel Supply Chain ◽  
The Impact

Recently, price comparison service (PCS) websites are more and more popular due to its features in facilitating transparent price and promoting rational purchase decision. Motivated by the industrial practices, in this study, we examine the pricing strategies of retailers and supplier in a dual-channel supply chain influenced by the signals of PCS. We categorize and discuss three situations according to the signal availability of PCS, under which the optimal pricing strategies are derived. Finally, we conduct a numerical study and find that in fact the retailers and supplier are all more willing to avoid the existence of PCS with the objective of profit maximization. When both of retailers are affected by the PCS, the supplier is more willing to reduce the availability of price information. Important managerial insights are discussed.

scholarly journals Pricing Strategies in Dual-Channel Supply Chain with a Fair Caring Retailer

Complexity ◽  
2019 ◽  
Vol 2019 ◽  
pp. 1-23 ◽  
Author(s):  
Lufeng Dai ◽  
Xifu Wang ◽  
Xiaoguang Liu ◽  
Lai Wei
Keyword(s):  
Supply Chain ◽  
Stackelberg Game ◽  
Pricing Strategy ◽  
Pricing Strategies ◽  
Equilibrium Solutions ◽  
Channel Competition ◽  
Dual Channel ◽  
Fairness Concerns ◽  
Dual Channel Supply Chain ◽  
The Impact

Manufacturers add online direct channels that inevitably engage in channel competition with offline retail channels. Since price is an important factor in consumers' choice of purchasing channel, pricing strategy has become a popular topic for research on dual-channel competition and coordination. In contrast to previous research on pricing strategies based on the full rationality of members, we focus on the impact of retailers' fairness concerns on pricing strategies. In this study, the hybrid dual-channel supply chain consists of one manufacturer with a direct channel who acts as the leader and a retailer who acts as the follower. First, we use the Stackelberg game approach to determine the equilibrium pricing strategy for a fair caring retailer. Simultaneously, we consider a centralized dual-channel supply chain as the benchmark for a comparative analysis of the efficiency of a decentralized supply chain. Furthermore, we study pricing strategies when the retailer has fairness concerns and determine the complete equilibrium solutions for different ranges of the parameters representing cross-price sensitivity and fairness. Finally, through numerical experiments, the pricing strategies, the profit and utility of the manufacturer and retailer, and the channel efficiency of the supply chain are compared and analysed for two scenarios. We find that fairness concerns reduce the manufacturer's profits, while for the most part, the retailers’ profit can be improved; however, the supply chain cannot achieve complete coordination.

PRICING DECISIONS FOR A CLOSED-LOOP SUPPLY CHAIN IN A FUZZY ENVIRONMENT

2012 ◽  
Vol 29 (01) ◽  
pp. 1240003 ◽  
Author(s):  
JIE WEI ◽  
JING ZHAO ◽  
YONGJIAN LI
Keyword(s):  
Supply Chain ◽  
Closed Loop ◽  
Wholesale Price ◽  
Retail Price ◽  
Economic Behavior ◽  
Optimal Pricing ◽  
Pricing Strategies ◽  
Closed Loop Supply Chain ◽  
Pricing Decisions ◽  
Fuzzy Environment

This paper studies pricing problem for a closed-loop supply chain consisting of a manufacturer and a retailer in a fuzzy environment. The purpose of this paper is to explore how the manufacturer makes his decisions about wholesale price and transfer price and how the retailer makes her decisions about retail price and collecting price in the expected value standard. Each firm's optimal pricing strategies are established by using game theory under the centralized and decentralized decision cases, respectively. Managerial insights into the economic behavior of firms are also investigated, which can serve as the basis for empirical study in the future. Moreover, we analyze numerically the results and give some insights on the influence of some parameters.

Sign in / Sign up

Export Citation Format

Share Document