Pricing for product-service system under dual-channel supply chain

To widen the market range, respond the customers' behavior change, and increase supply chain profitability, the manufacturer starts combining both online & offline channel as a new structure, is known as dual-channel supply chain (DCSC). In the DCSC introduction, some researches focus on the product without further consideration of complementary service-related. An advanced idea to sell a bundle of product and its related services are known as a product-service system (PSS). This research attempts to study the pricing strategy for product & service bundle under the PSS concept. To observe this hypothesis, a mathematical model represents pricing decision and managerial behavior in PSS practice is developed. The model that has been built will represent two scenarios of game theory namely Stackelberg Leadership and Bertrand. By using a numerical approach, optimum prices for all scenarios and all players under the DCSC-PSS structure could be proposed. The result shows additional service in the online channel provides higher profit than in the offline channel. And for both scenarios, shows the channel with additional service has a higher profit than the channel only has the main product, and it affects total profit for whole DCSC. When additional service increase, total profit for the whole DCSC also increases but only in Scenario 2.