Game Analysis of Selecting Manufacturing Service Modes for Manufacturers

Abstract

This analysis details manufacturers’ choices of self-service and outsourcing service modes, and the factors which influence manufacturers’ mode selection and pricing decisions, such as customer distribution for high-end and low-end markets, customer utility evaluation and transfer costs are analyzed in the frame work of the Hotelling model. The results indicate that customer utility evaluation for manufacturers’ self-service mode should be enhanced when manufacturers select this mode. And it is important for manufacturers who choose outsourcing service mode to improve service quality considering customer personal needs, expand differentiation of outsourcing services.