Jointly Making Decisions Of Price And Warranty In A Two-echelon Supply Chain

For a company, warranty service has two opposite effects. On the one hand, acompany can promote demand for the product by providing warranty service. Then thecompany’s reputation will is improved, the market share will be increased, and moreprofit will be obtained. On the other hand, the company should bear heavier burden andpay more after-sale costs. When the company makes decision of warranty service, sheshould jointly consider warranty service and other decision variables to optimize theperformance of the company. In this dissertation, production\marketing decisionsbetween members of a supply chain are study. The detailed research works aredescribed as follows:1, based on game theory, we studied decision-making of retail price and warrantylength for a two-stage supply chain with one supplier and one retailer. Mathematicalmodels have been developed to analyze the competition mechanism for two differentcases where (1) in the decentralized setting, with the manufacturer as the Stackelbergleader, the manufacturer and the retailer respectively independently make decisions ofretail price and warranty length to maximize individual profit per unit time,(2) in thedecentralized setting, with the retailer as the Stackelberg leader, the manufacturer andthe retailer respectively independently make decisions of retail price and warrantylength to maximize individual profits per unit time. According to the two settings, theanalytical solutions or joints equations for optimal retail price and warranty length havebeen obtained.2, This dissertation studied warranty and wholesale price decisions of a supplychain with one supplier and two competing manufacturers in which the supplier isleader and the two manufacturers are follower manufacturing substitutable products. Byusing backward induction, the strategy behavior of the supply chain members had beeninvestigated. We first discussed the game of the two manufacturers and obtained theNash equilibrium, and then discussed wholesale price decision and had the analyticalsolution. Finally, via a numerical example, we described the impact on the supply chainmembers of difference of the two manufacturers is size of the market.