Profit-sharing Based Coordination Strategy for Product Service Supply Chains Considering Old-for-new Trade-in and Extended Warranty Services
With the iteration and updating of modern science and technology,the increasing complexity of products and services has greatly increased consumers'dependence on enterprises providing them.In pur-chasing a product,the consumers hope to receive reliable and thoughtful services after purchase.As manufac-turers of automobiles and home appliances,etc.,transform toward the corresponding service providers,the quality of such services has gained increasing weight in swaying the consumers'purchasing decisions.In this light,the manufacturers and retailers can provide products and services such as old-for-new trade-in and extended warranty services through supply chain cooperation,which can bring additional revenue to them-selves;however,how to effectively motivate the members of a supply chain to cooperate with each other in a competitive market still poses a problem.Therefore,in the context of the"old-for-new trade-in+extended warranty service"business mode,we introduce in the profit-sharing based supply chain coordination contract.By constructing the online and of-fline dual-channel supply chain decision-making model based on Stackelberg game between the manufac-turer and the retailer and applying it to the coordination of a supply chain,we find that:(1)the proportion of profit-sharing is inversely related to the wholesale price and the online retail price of the product,and posi-tively related to the price of the extended warranty service and the trade-in price difference;(2)the propor-tion of profit-sharing is inversely related to the offline demand for the product,and positively related to the online demand for the product,the demand for the extended warranty service,and the demand for the old-for-new trade-in service;(3)the proportion of profit-sharing is positively related to the manufacturer's profit and the supply chain profit,and initially positively and then negatively related to the online retailer's profit;(4)the proportion of profit-sharing should be set within a reasonable range to motivate the online re-tailer to participate in supply chain coordination,and the participation of the manufacturer and the retailer can improve their own profit and the overall profit of the supply chain.The research findings can provide ref-erence for companies to formulate product service strategies such as old-for-new trade-in and extended warranty service,as well as supply chain decisions.This study mainly describes a way to encourage win-win cooperation between a manufacturer and a re-tailer by setting appropriate revenue sharing ratios to achieve the coordination of the product service supply chain.In future researches,attentions can be given to how manufacturers and retailers make decisions in and coordinate their supply chains in light of consumer preferences for specific product service channels(such as online or offline channels,direct sales or dealership)and conflicts between these channels.
old-for-new trade-inextended warranty serviceprofit sharingproduct service supply chainsupply chain coordination