To study the impact of response time on extended warranty services (EWS), the pricing strategy of EWS is discussed with different response time in a competitive environment. Considering of a two-level supply chain composed of one manufacturer, one self-owned retailer (SR) and one franchise retailer (FR), there exists the differentiated response time in EWS provided by SR and FR. Based on the consumer demand function in two cases, the optimal pricing strategy of EWS for supply chain members is analyzed. Research shows that: (1) The EWS price of SR increases with the increasing of the differential response time, but which of FR decreases and changing faster. (2) The manufacturer is more profitable when the differential response time is smaller, and two retailers’ profits continue to increase as the differential response time increasing. (3) The retailers' profits are always higher than the manufacturer’s, and both supply chain members will choose the market that consumers are more sensitive to differentiated response time to realize their respective benefits. The conclusion provides enlightenment and reference for enterprises to make decision of EWS.
Zhou, Xingjian; Ji, Hongyue; Pan, Jiali; Li, Changrong; and Cai, Lihua, "The Pricing Strategy of Extended Warranty Services in Supply Chain Considering Response Time" (2022). WHICEB 2022 Proceedings. 84.