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Price and service competition with maintenance service bundling

Wang, Yi; Sun, Linyan; Qu, Rong; Li, Gang

Authors

Yi Wang

Linyan Sun

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RONG QU rong.qu@nottingham.ac.uk
Associate Professor

Gang Li



Abstract

In many equipment manufacturing industries, firms compete with each other not only on products price, but also on maintenance service. More and more traditional products oriented firms are offering their customers products bundled with maintenance service (P&S bundles). In this study, we examine firms’ incentive to offer customers products bundling with long-term maintenance or repair support service in a duopoly competitive environment. When providing P&S bundles, a firm need to determine the service level (in terms of average response time guarantee for the service in this paper) to offer and needs to build a service facility to handle the maintenance service requirements. Based on the analysis of three sub-game models, we characterize the market conditions in which only one firm, both firms or neither firm will offer P&S bundles. Finally, we analyze the affects of several market factors on firms’ strategy choices.

Journal Article Type Article
Publication Date Jun 1, 2015
Journal Journal of Systems Science and Systems Engineering
Print ISSN 1004-3756
Electronic ISSN 1861-9576
Publisher Springer Verlag
Peer Reviewed Peer Reviewed
Volume 24
Issue 2
APA6 Citation Wang, Y., Sun, L., Qu, R., & Li, G. (2015). Price and service competition with maintenance service bundling. Journal of Systems Science and Systems Engineering, 24(2), https://doi.org/10.1007/s11518-015-5267-z
DOI https://doi.org/10.1007/s11518-015-5267-z
Keywords Service Competition, Queues, Products and service bundles, Product differentiation
Publisher URL http://link.springer.com/article/10.1007/s11518-015-5267-z
Copyright Statement Copyright information regarding this work can be found at the following address: http://eprints.nottingh.../end_user_agreement.pdf
Additional Information The final publication is available at Springer via http://dx.doi.org/10.1007/s11518-015-5267-z

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Copyright Statement
Copyright information regarding this work can be found at the following address: http://eprints.nottingham.ac.uk/end_user_agreement.pdf





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