Coordination of e-commerce supply chain when e-commerce platform providing sales service and extended warranty service

Abstract

ABSTRACT With the rapid development of cybereconomy and the enhancement of sales service, many e-commerce platforms provide extended warranty service to alleviate consumers from worries about product quality when consumers purchasing products online. This study examines the decisions and coordination of the e-commerce supply chain where the e-commerce platform dominates and provides sales service and extended warranty service. The findings show that the centralised decision-making model is an ideal model because of the low sales price, high service level and high extended warranty price. With the increase of the consumers’ sensitivity coefficient to the extended warranty service price, sales price increases but extended warranty service price and service level decrease, the retailer’s profit and the platform's profit decrease. The proposed contract of ‘revenue sharing joint commission’ can realise the coordination of e-commerce supply chain.