Effects of customer experiences on new product supply chain coordination
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    Abstract:

    Customers who purchase a new or innovative product face product fit risks,this risk can be reduced by customer experiences. We consider two forms of contracts that characterized opposite natures: sales rebate contract,in which supplier compensates sellers for the units that are sold,and buyback contract,in which supplier compensates sellers for the units that are unsold. We find that enhancing customer exogenous experiences so that customers can obtain more accurate information indicating his type of maximum willingness to pay,the seller’s price is higher,and supply chain coordination,the seller’s as well as supplier’s profits are higher; whereas enhancing customer endogenous experiences so that customers can obtain more refund for return,supply chain coordination as well as supplier’s profits will decrease. We also show that supply chain coordination cannot be achieved by sales rebate contract,however,buyback contract achieves supply chain coordination,and this contract can allocate supply chain total profits arbitrarily between the supplier and the seller by negotiating wholesale price.

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  • Online: April 17,2018
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