Optimizing Reliability and Extended Warranty Pricing Decisions in a Supply Chain

Dr Wang, Jingqi   (Principal Investigator (PI))

Professor Shin Hyoduk   (Co-Investigator)

30

2016-01-01

299996

Optimizing Reliability and Extended Warranty Pricing Decisions in a Supply Chain

extended warranty, pricing, reliability, supply chain management

Operations Management

Business Studies (B)

17501015

General Research Fund (GRF)

2015

Completed

1) To solve the base model and compare equilibrium supply chain decisions in three supply chain structures (centralized, decentralized with an independent warranty underwriter, and decentralized with the manufacturer as the underwriter) to shed light on how firms can make effective product reliability and extended warranty pricing decisions. 2) To extend the base model to analyze cases in which the manufacturer and third-party insurer have different costs for honoring extended warranties, and to examine how such cost asymmetry affects the retailer’s optimal decision on whose extended warranty to sell. 3) To analyze other contract forms such as the revenue sharing contract, and to study how effective they are in coordinate the supply chain. 4) To explore other extensions of the base model, such as incorporating replacement purchases, to generate more managerial insights.