The Strategy of New Product Introduction in Durable Goods with Secondary Market: Application of the Optimization Method to Supply Chain Problem
The aim of this paper is to address how the secondary market affects the strategy of the manufacturer’s new product introduction by using the optimization method. To do so, we develop a two-period model in which a monopolistic manufacturer sells its new durable products directly to end consumers in...
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| Main Authors: | , |
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| Format: | Article |
| Language: | English |
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Wiley
2014-01-01
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| Series: | Journal of Applied Mathematics |
| Online Access: | http://dx.doi.org/10.1155/2014/543092 |
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| _version_ | 1832551315556794368 |
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| author | Pei Zhao Zhongkai Xiong |
| author_facet | Pei Zhao Zhongkai Xiong |
| author_sort | Pei Zhao |
| collection | DOAJ |
| description | The aim of this paper is to address how the secondary market affects the strategy of the manufacturer’s new product introduction by using the optimization method. To do so, we develop a two-period model in which a monopolistic manufacturer sells its new durable products directly to end consumers in both periods, while an entrant operates a reverse channel selling used products in the secondary market. We assume that the manufacturer launches a higher quality product in the second period for the technological innovation. We find that the secondary market can actually increase the manufacturer’s profitability and drives the new product introduction in the second period. We also derive the effect of the durability and the degree of quality improvement on the pricing of supply chain partners. |
| format | Article |
| id | doaj-art-539091580c2c4ef986c8296139026d86 |
| institution | Kabale University |
| issn | 1110-757X 1687-0042 |
| language | English |
| publishDate | 2014-01-01 |
| publisher | Wiley |
| record_format | Article |
| series | Journal of Applied Mathematics |
| spelling | doaj-art-539091580c2c4ef986c8296139026d862025-02-03T06:01:44ZengWileyJournal of Applied Mathematics1110-757X1687-00422014-01-01201410.1155/2014/543092543092The Strategy of New Product Introduction in Durable Goods with Secondary Market: Application of the Optimization Method to Supply Chain ProblemPei Zhao0Zhongkai Xiong1School of Economics and Business Administration, Chongqing University, Chongqing 400044, ChinaSchool of Economics and Business Administration, Chongqing University, Chongqing 400044, ChinaThe aim of this paper is to address how the secondary market affects the strategy of the manufacturer’s new product introduction by using the optimization method. To do so, we develop a two-period model in which a monopolistic manufacturer sells its new durable products directly to end consumers in both periods, while an entrant operates a reverse channel selling used products in the secondary market. We assume that the manufacturer launches a higher quality product in the second period for the technological innovation. We find that the secondary market can actually increase the manufacturer’s profitability and drives the new product introduction in the second period. We also derive the effect of the durability and the degree of quality improvement on the pricing of supply chain partners.http://dx.doi.org/10.1155/2014/543092 |
| spellingShingle | Pei Zhao Zhongkai Xiong The Strategy of New Product Introduction in Durable Goods with Secondary Market: Application of the Optimization Method to Supply Chain Problem Journal of Applied Mathematics |
| title | The Strategy of New Product Introduction in Durable Goods with Secondary Market: Application of the Optimization Method to Supply Chain Problem |
| title_full | The Strategy of New Product Introduction in Durable Goods with Secondary Market: Application of the Optimization Method to Supply Chain Problem |
| title_fullStr | The Strategy of New Product Introduction in Durable Goods with Secondary Market: Application of the Optimization Method to Supply Chain Problem |
| title_full_unstemmed | The Strategy of New Product Introduction in Durable Goods with Secondary Market: Application of the Optimization Method to Supply Chain Problem |
| title_short | The Strategy of New Product Introduction in Durable Goods with Secondary Market: Application of the Optimization Method to Supply Chain Problem |
| title_sort | strategy of new product introduction in durable goods with secondary market application of the optimization method to supply chain problem |
| url | http://dx.doi.org/10.1155/2014/543092 |
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