Author(s)

Yan-Fei Tan, Yu-Yin Yi, Jun-Jiang Yao

Management School, Jinan University, Guangzhou, China.

This paper constructed a retailer-leading supply chain system considering the extended warranty (EW) with single manufacturer and single retailer to study the influence of network externality on retailer-leading supply chain coordination. First of all, we analyzed and compared the retail price, EW price, EW quality, and the total system profit in centralized and decentralized model respectively. Then we analyzed the influence of network externality on decision variables and system profits. We found that the network externality increased the loss of decision efficiency. After that, we considered the coordination of the supply chain system with extended warranty. Finally, some numerical examples were presented for further analysis.

Extended Warranty, Network Externality, Contract Coordination, Game Model, Two-Part Tariff

Tan, Y. , Yi, Y. and Yao, J. (2015) Supply Chain Coordination for Strong Retailer with Extended Warranty under Network Externality. Journal of Service Science and Management, 8, 393-409. doi: 10.4236/jssm.2015.83041.