Optimal price, warranty length and production rate for free replacement policy in the static demand market☆

Warranty service has an important role in the product transactions. The price is related to length of warranty period of product. Considering the reality, based on the consumer utility theory, assuming free replacement policy and the product failure with Weibull distribution function, this paper studies the differential pricing issues for the product with multiple warranty periods for pro-rata policy. This paper analyzes the optimal pricing strategy, and verifies the validity of the model through the numerical analysis and analyzes the difference between differential pricing and single pricing. Then this paper analyzes the impact of the consumer shift flexibility to the benefits of manufacturers.

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“…According to Chin-Chun Wu [12] , product warranty and price will have an impact on consumer demand. This paper assumes that demand is…”

Section: Model Establishing and Solutionmentioning

confidence: 99%

Notice of Retraction: Study on differential pricing decisions for the product with multiple warranty periods for pro-rata policy

Zhen

Wang

2011

2011 2nd International Conference on Artificial Intelligence, Management Science and Electronic Commerce (AIMSEC)

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“…(24), (26), and (27), the determinant of Hessian matrix is: J i3 = @ 2 JT P i3 (n;T;t) @T 2 @ 2 JT P i3 (n;T;t) @T @t @ 2 JT P i3 (n;T;t) @t@T @ 2 JT P i3 (n;T;t) @t 2 = @ 2 JT P i2 (n; T; t) @T 2 @ 2 JT P i2 (n; T; t) @t 2 @ 2 JT P i2 (n; T; t) @T @t (28) where i = 1; 2 and 1 = 1; 2 = 0. Therefore, the following result can be obtained from Eqs.…”

Section: There Are Three Cases Arising As Follows: (I) M I T T (Ii)mentioning

confidence: 99%

“…Kim and Hong [26] extended the model proposed by Rosenblatt and Lee [20] to determine the optimal length of production run in deteriorating production processes. Wu et al [27] investigated the e ects of quality-guaranteed strategies on the optimal production quantity, wherein the manufacturer o ers free repairs for detective products. Tayyab and Sarkar [28] revisited an EPQ model with an imperfect multi-stage production system by considering a random defective rate.…”

Section: Introductionmentioning

confidence: 99%

Optimal Production and Ordering Strategies with Defective Items and Allowable Shortage under Two-part Trade Credit

2018

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Abstract. This study investigated a production-inventory model with defective items under a two-part trade credit, where the agreement of conditionally freight concession is considered in an integrated supply chain. It is assumed here that the retailer conducts the inspection process before selling incoming items. All the defective items are discovered, stored, and sold as a single batch to a secondary market at a decreased price. Furthermore, shortages are allowed and completely backlogged for the retailer. The purpose of this study is to determine the optimal number of shipments per production cycle for the supplier and the optimal length of time when there is no inventory shortage and replenishment cycle for the retailer, such that the total pro t function has a maximum value. In theoretical analysis, the existence and uniqueness of the optimal solutions are shown, and an algorithm is developed to nd the optimal solutions. Furthermore, numerical examples are presented to demonstrate the solution procedures, and a sensitivity analysis of the optimal solutions regarding all parameters is also carried out.

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“…Enterprise was always supposed to use its products and services to meet the material and spiritual needs of consumers. If the producer promises to renew or repair products when failures occur, the commitment length of warranty and the reliability of the product, which is related to its life-cycle distribution, play a key role on determining the total cost of product (Wu et al, 2009). A satisfactory warranty policy will certainly enhance consumers' purchase willingness, and will benefit the sustainability and resource-efficiency.…”

Section: Introductionmentioning

confidence: 99%

“…There are a number of studies concerning the pricing problem (e.g. Choi, 1991;Tsay and Agrawal, 2004;Wu et al, 2009;Zhao et al, 2012). Choi (1991), for instance, examined the optimal pricing decision of two substitutable products in a two-echelon supply chain consisting of two manufacturers and one retailer, and investigated three types of game structures.…”

Section: Introductionmentioning

confidence: 99%

Price and warranty period decisions for complementary products with horizontal firms' cooperation/noncooperation strategies

Wei

Zhao

2015

Journal of Cleaner Production

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Optimal price, warranty length and production rate for free replacement policy in the static demand market☆

Cited by 77 publications

References 24 publications

Notice of Retraction: Study on differential pricing decisions for the product with multiple warranty periods for pro-rata policy

Notice of Retraction: Study on differential pricing decisions for the product with multiple warranty periods for pro-rata policy

Optimal Production and Ordering Strategies with Defective Items and Allowable Shortage under Two-part Trade Credit

Price and warranty period decisions for complementary products with horizontal firms' cooperation/noncooperation strategies

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