Abstract:We study the design of extended warranties in a supply chain consisting of a manufacturer and an independent retailer. The manufacturer produces a single product and sells it exclusively through the retailer. The extended warranty can be offered either by the manufacturer or by the retailer. The party offering the extended warranty decides on the terms of the policy in its best interest and incurs the repair costs of product failures. We use game theoretic models to answer the following questions. Which scenario leads to a higher supply-chain profit, the retailer offering the extended warranty or the manufacturer? How do the optimum price and extended warranty length vary under different scenarios? We find that, depending on the parameters, either party may provide better extended warranty policies and generate more system profit. We also compare these two decentralized models with a centralized system where a single party manufactures the product, sells it to the consumer and offers the extended warranty. We also consider an extension of our basic model where either the manufacturer or the retailer resells the extended warranty policies of a third party (an independent insurance company, for example), instead of offering its own policy. Text of paper: DESIGN OF EXTENDED WARRANTIES IN SUPPLY CHAINS UNDER ADDITIVE DEMAND AbstractWe study the design of extended warranties in a supply chain consisting of a manufacturer and an independent retailer. The manufacturer produces a single product and sells it exclusively through the retailer. The extended warranty can be offered either by the manufacturer or by the retailer. The party offering the extended warranty decides on the terms of the policy in its best interest and incurs the repair costs of product failures. We use game theoretic models to answer the following questions. Which scenario leads to a higher supply-chain profit, the retailer offering the extended warranty or the manufacturer? How do the optimum price and extended warranty length vary under different scenarios? We find that, depending on the parameters, either party may provide better extended warranty policies and generate more system profit. We also compare these two decentralized models with a centralized system where a single party manufactures the product, sells it to the consumer and offers the extended warranty. We also consider an extension of our basic model where either the manufacturer or the retailer resells the extended warranty policies of a third party (an independent insurance company, for example), instead of offering its own policy.

In this paper, we present a review of the models for the management of global supply chains and some evidence concerning current practice. Our review is restricted to the literature on intrafirm global supply chains and is motivated by empirical data concerning the extent of intrafirm globalization. The review of the literature suggests that research has not evolved in a coherent manner, while the data suggest that the extent of globalization is also hard to gauge. Indeed, the journey toward supply chain globalization is far from over. Significant gaps exist between theory and the practice. We conclude with a summary of directions for future research.

This paper, motivated by the experiences of major US−based broadcast television network, presents algorithms and heuristics to schedule commercial videotapes. Major advertisers purchase several slots to air commercials during a given time period on a broadcast network. We study the problem of scheduling advertiser's commercials in the slots it purchased when the same commercial is to be aired multiple times. Under such a situation, the advertisers typically want the airings of a commercial to be as much evenly spaced as possible. Thus, our objective is to schedule a set of commercials on a set of available slots such that multiple airings of the same commercial are as much evenly spaced as possible. A natural formulation of this problem is a mixed integer program that can be solved using third party solvers. We also develop a branch−and−bound algorithm based on a problem specific bounding scheme. Both approaches fail to solve larger problem instances within a reasonable timeframe. We present an alternative mixed integer program that lends itself to efficient solution. For solving even larger problems, we present multiple heuristics. Various extensions of the basic model are discussed. November 2002Abstract This paper, motivated by the experiences of major US-based broadcast television network, presents algorithms and heuristics to schedule commercial videotapes. Major advertisers purchase several slots to air commercials during a given time period on a broadcast network. We study the problem of scheduling advertiser's commercials in the slots it purchased when the same commercial is to be aired multiple times. Under such a situation, the advertisers typically want the airings of a commercial to be as much evenly spaced as possible. Thus, our objective is to schedule a set of commercials on a set of available slots such that multiple airings of the same commercial are as much evenly spaced as possible. A natural formulation of this problem is a mixed integer program that can be solved using third party solvers. We also develop a branch-and-bound algorithm based on a problem specific bounding scheme. Both approaches fail to solve larger problem instances within a reasonable timeframe. We present an alternative mixed integer program that lends itself to efficient solution. For solving even larger problems, we present multiple heuristics. Various extensions of the basic model are discussed.

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