The quality admission and price decisions of production capacity on the third‐party platform for shared manufacturing

Abstract

AbstractMany third‐party platforms for shared manufacturing (platforms) have developed rapidly in recent years. The quality admission and pricing of production capacity are crucial issues for these platforms. This paper focuses on the platform supply chain composed of a platform, multiple manufacturers with surplus production capacity (sharers), and multiple manufacturers with insufficient production capacity (renters). Considering the impact of the production capacity quality on the shared scale and rental demand of production capacity, this paper constructs a game model for the platform supply chain under different quality admission scenarios, investigates the quality admission and price decisions of production capacity on the platform, and analyses the impact of the quality admission on the sharers’ and renters’ profits. The results show that the platform sets the quality admission when the sharers’ production capacity scale is small and the platform regulatory cost is low. The platform always increases its service price but may reduce the rental price of production capacity under the quality admission scenario. When the sharers’ production capacity scale is large, the platform lowers the threshold of quality admission with the quality elasticity of production capacity increasing. In addition, when the quality elasticity of production capacity and platform regulatory cost are low, and the sharers’ production capacity scale is small, the quality admission of the platform realizes the win–win–win situation for the platform, renters, and sharers.