The impact of used products on channel coordination and quality decision for warranted products

Hui Chiung Lo, Ruey Huei Yeh, Nani Kurniati, Jung Jung Lin

Research output: Chapter in Book/Report/Conference proceedingConference contributionpeer-review

2 Citations (Scopus)

Abstract

This paper studies a problem of channel coordination for durable products sold with a warranty. Offering warranty may promote the customer's satisfaction, but it also results in additional costs for manufacturers. The warranty cost depends on the quality of products. At the same time, cost-sharing contract is a negotiating mechanism to achieve channel coordination and increase the competitiveness of a supply chain. Hence, we try to introduce a warranty cost sharing policy which the warranty cost is shared out between manufacturers and retailers. In addition, many sales of a new product occur simultaneously with a trade-in of the used product to reduce purchasing cost and confirm to the sense of environmental protection. In other words, manufacturers and retailers of new products have to contend with the potential competition from a second-hand market. Therefore, taking account of used products, this paper employs a two-period game model to analyze the benefits of channel coordination and optimal pricing and quality decisions in a manufacture-retailer supply chain for new goods sold with warranty.

Original languageEnglish
Title of host publicationProceedings - 19th ISSAT International Conference on Reliability and Quality in Design, RQD 2013
Pages131-135
Number of pages5
Publication statusPublished - 2013
Externally publishedYes
Event19th ISSAT International Conference on Reliability and Quality in Design, RQD 2013 - Honolulu, HI, United States
Duration: 5 Aug 20137 Aug 2013

Publication series

NameProceedings - 19th ISSAT International Conference on Reliability and Quality in Design, RQD 2013

Conference

Conference19th ISSAT International Conference on Reliability and Quality in Design, RQD 2013
Country/TerritoryUnited States
CityHonolulu, HI
Period5/08/137/08/13

Keywords

  • Channel coordination
  • Cost sharing
  • Durability
  • Heterogeneous consumer

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