Research On The Strategy Of Warranty Service In Supply Chains

With the development of social economy,the competition of products has extended from the traditional price and quality competition to the competition of warranty service,from the competition of individual manufacturer to the competition of the whole supply chain system.The warranty service of products has become an important measure for manufacturers to win profits and competitiveness.This paper uses game theory,operation management and consumer utility theory to study the problem of warranty service in supply chain,which aims to provide the optimal decision scheme for the manufacturers and retailers in the supply chain.This paper focuses on the simple supply chain consisting of single manufacturer and single retailer.Firstly,considering the impact of warranty service on the product demand and the manufacturer's cost in the supply chain,the product demand function which is affected by the quality of the warranty service is introduced.At the same time,the cost function which is influenced by the length of the warranty service is considered,and the optimal decision of each member in the supply chain under centralized decision and decentralized decision is studied respectively.Secondly,considering the quality level of the product can be improved by the manufacturer's input,the quality level of the product can increase the manufacturer's research cost on the one hand,but it can also reduce the maintenance cost of the manufacturer's warranty service.At the same time,the improvement of the quality level can increase the demand of the product.At this time,the new product demand function is not only affected by the quality of warranty service,but also influenced by the quality level of the product,while the cost of warranty service is inversely proportional to the quality of the product.Using game theory and numerical analysis,the optimal decision plan of manufacturers and retailers under centralized decision and decentralized decision is explored.Finally,warranty service can be divided into basic warranty and extended warranty,the problem research focuses on manufacturer providing basic warranty services,and the retailer provides extended warranty services,extended warranty services make the retailer take the additional cost and gain additional income.Therefore,it is necessary to make decision to the optimal price of extended warranty services.The article uses cosumer utility theory to obtain the proportion of consumers buying extended warranty services when the type of consumer is uniform distributed.By using game theory and numerical analysis method,the optimal decision of manufacturers and retailers under centralized decision and decentralized decision-making is studied respectively.The research found that the profit of supply chain is not necessarily the maximum under centralized decision,and the optimal decision results in the supply chain are influenced by many parameters.