Supply Chain Coordination Contracts Based On Extended Warranty Service

With the development of global economy, the extended warranty service gradually makes considerable profit for the companies. More and more enterprises begin to focus on the end of the supply chain-the extended warranty service. The extended warranty service expands the product warranty time and the quality assurance range, provides services such as maintenance and replacement, but customers need to pay a fee. Most of academic research for extended warranty services focused on the supply chain nodes,such as manufacturers, consumers, etc., there is little paper focused on the extended warranty service, so this paper tries to study the supply chain coordination problems under the extended warranty service.We build the supply chain model under the extended warranty service by the Game theory. From the point of system benefit of the supply chain and the pareto improvement for all parties of the supply chain, we study the the benefit improvement of the supply chain under the extended warranty service. The main research include:revenue sharing contract of the supply chain under the extended warranty service; the quantity discount contract of supply chain under the extended warranty service; the three-tariffs contract of supply chain under the extended warranty service.First, we build the model of supply chain based on extended warranty service,analysis the total profit of the supply chain system under the centralized and decentralized structure and the respective profit of manufacturers and retailers.Then we compare the total benefit of supply chain under centralized and decentralized supply chain, and analysis the necessity of coordination, it is concluded that no matter what the product demand sensitive coefficient, extended warranty service costs, the length of extended warranty service and the extended warranty service demand sensitive coefficient are, there is the coordinate space.Secondly, we introduce the revenue sharing contract, first we design two cases,include the retailers providing extended warranty and the manufacturers providing extended warranty, then we distribute the total revenue from centralized system to the manufacturers and retailers by setting up an income distribution factor, the benefits that the manufacturers and retailers are shared more that under decentralized respectively, so we reach the optimal system performance of the supply chain and the pareto performance improvement for all parties of the supply chain.Then we introduce the quantity discount contract, we first design the quantity discount model under extended warranty service, and then from the point of system benefit of the supply chain and the pareto improvement for all parties of the supply chain, we analysis the situation in which the retailers provide extended warranty. Then from the point of the pareto improvement for all parties of the supply chain we analysis the other situation in which manufacturers provide extended warranty service. Finally,we find out the range of the corresponding initial wholesale price respectively, and the influence of various parameters on quantity discount rate.Finally, we introduce the three-tariffs contract under the extended warranty service,first of all, from the pareto improvement for all parties of the supply chain, we analysis the situation in which the retailers provide extended warranty. Then from the point of the pareto improvement for all parties of the supply chain we analysis the other situation in which manufacturers provide extended warranty service. Finally, we find out the range of the corresponding initial wholesale price respectively, and the influence of various parameters on price and extended warranty service discount rate.