Warranty Service Management Strategies In A Two-stage Supply Chain

On the context of rapid developments of social economics, technologies and increasingly fierce competition, product warranty service has been a key action in enhancing the profits and competitive advantages of manufacturing enterprises and their products related supply chains. By using theories and methodologies of operations management, game theory and consumer behavior, this paper has examined warranty strategies in supply chains, in order to design the optimal warranty strategies and coordination mechanisms for the player in different supply chains.This paper includes six chapters, which are elaborated as follows.The first chapter raises the importance of warranty service management and reviews the related literature of warranty management. Then the research methodology, the main contents and research significance are also clarified.Chapter two examines the optimal warranty strategies and the coordination mechanisms of a two-stage supply chain with a manufacturer and a retailer.In chapter three, warranty management in a supply chain with two competitive retailers are examined. For this purpose, three scenarios are considered: no retailers, only one retailer and both the two retailers providing their extended warranties. The optimal warranty strategies and the interactions between the two types of warranties are designed.The fourth chapter presents two models, i.e., manufacturer providing or not providing the extended warranty, to investigate the impact of the competition of the extended warranties between the manufacturer and the retailer on the warranty strategies, and then provides the optimal warranty strategies.In the fifth chapter, the warranty strategies for a supply chain are investigated. To this end, two scenarios are considered, i.e., the manufacturer providing the warranty and the retailer providing the warranty. Then the coordination mechanisms are established based on the wholesale price contract, revenue sharing and warranty-cost sharing contract, and the buy-back contract.The last chapter summarizes all the work of this thesis, and gives some useful suggestions for future research.The research results show that the manufacturer’s warranty decisions depend on the retailer’s decisions. The manufacturer has no incentive to offer the base warranties when the retailer’s extended warranties are bundled with the products. However, when the extended warranties are sold separately from the products, a longer retailer’s extended warranty period may lead to a shorter manufacturer’s base warranty period. Moreover, the competition between retailers in terms of the product substitutability has no impact on warranty decisions, but the competition of extended warranties between the retailer and the manufacturer exert the manufacturer to extend his base warranty length and the retailer to reduce his extended warranty price. Interestingly, the competition of the product and the extended warranties improve the total profit of the supply chain. Finally, a supply chain can be effectively coordinated by the proposed contract with revenue sharing and warranty-cost sharing, and the buy-back contract.