Research On Quality And Warranty Decision Of Durable Product Manufacturing Enterprises In Vertical And Horizontal Competitive Environment

Product quality and warranty service period are two important and closely related business decisions.The quality of the product affects the product’s failure rate,which in turn affects the cost of warranty service during the warranty period.Therefore,when deciding the time limit of quality control and warranty period,enterprises need to carefully balance the cost of quality control in the production stage and the cost of warranty service in the sales stage,and different market structures,product prices,and competitive pressures will also affect the decision-making of enterprises.In this paper,it is found that this kind of research is rare by combing the relevant literature at home and abroad.It is considered to study from the following aspects through game theory and optimization theory.Firstly,by considering that a single manufacturer sells products with a bundled warranty to consumers under the monopoly market structure as the research background,a two-stage model is established due to the irreversible nature of the quality decision.Enterprises make decisions to maximize profits.The results show that enterprise quality and warranty decisions are negatively correlated with unit quality control cost and warranty cost,but positively correlated with product price.And when the market pays more attention to warranty services,the warranty services of enterprises can be effectively received by the market,and the quality and warranty decisions present a positive response.Secondly,considering the two-level supply chain market structure composed of one manufacturer and one retailer,and there is vertical competition between upstream and downstream.Aiming at two different warranty undertaking strategies,the design of product quality and warranty design and the optimal profit of each member of the supply chain under different warranty undertaking situations are compared and analyzed,and the parameter range of improving quality and extending warranty is given.The results show that when consumers are less sensitive to warranty services,if retailers undertake warranty services,product quality and warranty services will last longer.On the contrary,when consumers are more sensitive to warranty,they also need to look at the market price level of the products.In addition,when the warranty is undertaken by the manufacturer,retailers will get more profits than when they undertake the warranty,and there is obvious free-riding behavior.Price is also an important marketing tool for enterprises.Once the product price is too high,consumers may give up buying,which makes the product demand affected by the duration of the warranty and the product price.Two-level supply chain considering product price,quality and warranty service as decision objects.We analyze centralized decision-making and two decentralized systems with optional warranty and provide the structural properties of the equilibrium strategy.In addition,we also compare the results of centralized and decentralized systems and find the conditions under which one system is better than the other.Finally,considering the horizontal competition model.The two enterprises provide users with alternative products and compete for quality and warranty at the same time in two stages.The results show that,in equilibrium,when the profit of products is small,the cost of improving quality is high,or the cost of unit warranty service is high,enterprises tend to provide low-quality products and short warranty service.The numerical experiments show that in the case of fierce competition,for example,the products of two companies are completely replaceable.When customers are sensitive to the warranty period,the company may provide low-quality products with a short warranty period,because radical actions will cause radical reactions from competitors.