Service provision decisions of competitive manufacturers: From service spillover perspective

This paper investigates competing manufacturers’ strategic choice of service provision in a two-level supply chain composed two manufacturers and one common retailer. Our results indicate that the strategy that two competing manufacturers provide services is always the dominant choice, and two competing manufacturers could have the highest profit in that case. But when only one of them provides services, the result is related to the potential market size, the unit service cost coefficient and the service spillover intensity. Finally, through the cost sharing and quantity competition extensions, we find the Pareto regions of cost sharing under the equilibrium strategy, and there will be multiple Nash equilibrium regions under the quantity competition.

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Publication Details

Journal
Journal of the Operational Research Society
Published
2024-08-11
DOI
https://doi.org/10.1080/01605682.2024.2385480
Citations
5
Primary Topic
Supply Chain and Inventory Management
Type
article
Field-Weighted Citation Impact
2.64

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article

Service provision decisions of competitive manufacturers: From service spillover perspective

Caihong Bu, Pin Zhou, Yunkai Zhai
5 citations
Journal of the Operational Research Society
Supply Chain and Inventory Management
2.64
article

Service provision decisions of competitive manufacturers: From service spillover perspective

Caihong Bu, Pin Zhou, Yunkai Zhai
article en
5 citations

Abstract

This paper investigates competing manufacturers’ strategic choice of service provision in a two-level supply chain composed two manufacturers and one common retailer. Our results indicate that the strategy that two competing manufacturers provide services is always the dominant choice, and two competing manufacturers could have the highest profit in that case. But when only one of them provides services, the result is related to the potential market size, the unit service cost coefficient and the service spillover intensity. Finally, through the cost sharing and quantity competition extensions, we find the Pareto regions of cost sharing under the equilibrium strategy, and there will be multiple Nash equilibrium regions under the quantity competition.

Journal of the Operational Research SocietyVol. 76(4)
Huazhong Agricultural University (CN), Zhengzhou University (CN)
National Natural Science Foundation of China, Natural Science Foundation of Hubei Province
Openalex Percentile: Top 9%
Supply Chain and Inventory Management
2.64
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Service provision decisions of competitive manufacturers: From service spillover perspective — Caihong Bu, Pin Zhou, et al. · Journal of the Operational Research Society (2024) | TGRS Research Map | TGRS