Cost optimization in a warranty service contract with asymmetric actions

DOI

10.2991/mse-15.2016.72How to use a DOI?

Keywords

warranty, warranty period, warranty price, asymmetric actions, cost optimization

Abstract

A warranty is a service contract between a manufacturer and a customer which plays a vital role in many businesses and legal transactions. This paper focuses on the research on optimizing the cost in a service contract among one manufacturer and one agent with asymmetric actions. In order to obtain an optimal cost, we use the method of game theory to simulate the interaction among participants. Through setting the manufacturer's optimal sale price, warranty period and warranty price, and the agent's optimal maintenance price or repair price, we minimize the cost and maximize the profit. Finally, the paper presents several numerical examples and numerical analysis to illustrate the models, and put forward some interesting managerial insights.

Copyright

© 2016, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - CONF
AU  - Yixuan Song
AU  - Ying Huang
AU  - Dan Zhang
PY  - 2016/03
DA  - 2016/03
TI  - Cost optimization in a warranty service contract with asymmetric actions
BT  - Proceedings of the 2015 International Conference on Mechanical Science and Engineering
PB  - Atlantis Press
SP  - 458
EP  - 467
SN  - 2352-5401
UR  - https://doi.org/10.2991/mse-15.2016.72
DO  - 10.2991/mse-15.2016.72
ID  - Song2016/03
ER  -