Decision On Supply Chain Of Substitute Products Based On Service And Pricing

In recent years, with the phenomenon of product homogeneity is more and more serious, the price difference between homogeneous products is getting smaller and s-maller, so the price advantage is no longer the only way that enterprises can win in the fierce market for a long time. So one enterprise who wants to win in the fierce market must provide better service than other enterprises. And more and more customers are increasingly concerned about whether they can enjoy high quality service. As a dimen-sion of service, the length of the warranty time plays an increasingly important role in the process of product sales. Laws in many countries also require companies to provide a certain quality assurance time for the products that are sold. But for durable prod-ucts, the basic warranty service that firm provides generally shorter, and can't meet the requirements of all users.So it is very important for the enterprise to provide the proper extension service.In this background, this paper mainly studies the supply chain decision problems from the following two aspects.Firstly, a supply chain model consisting of a manufacturer and a retailer is studied.In this model, the basic service level determined by the manufacturer ,and the optional service level determined by the retailer. Then, we prove the existence of the optimal solution. Finally, we derive the optimal basic service level and optimal optional service.And further we analyze the equilibrium decisions change of each parameter and the profit of the supply chain members on the change of the parameters.Secondly, a supply chain model consisting of a manufacturer and a retailer is constructed based on the Stackelberg game framework, and the supply chain decision based on pricing and optional service is studied. We establish two models:(1)the optional service level and the wholesale price determined by the manufacturer, and the retail price determined by the retailer; (2)the wholesale price determined by the manufacturer,and the optional service level and the retail price determined by the retailer. We prove the existence of the equilibrium solution and obtain the equilibrium solution. Furthermore,the equilibrium decisions and profits of each supply chain member under the two models are compared through numerical examples.