Research on operation decision of bundling supply chain of mobile phone and telecom service

CAO Yu, YANG Xilong, WU Kan

Systems Engineering - Theory & Practice ›› 2021, Vol. 41 ›› Issue (4) : 919-931.

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Systems Engineering - Theory & Practice ›› 2021, Vol. 41 ›› Issue (4) : 919-931. DOI: 10.12011/SETP2019-2878

Research on operation decision of bundling supply chain of mobile phone and telecom service

  • CAO Yu, YANG Xilong, WU Kan
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Abstract

This paper studies a two-stage supply chain consisting of a mobile phone manufacturer and a telecom operator, in which the telecom operator purchases mobile phones from the mobile phone manufacturer and bundles the mobile phone and telecom services as "contract mobile phone" for sale, and discusses the impact of leading player changes and different contract designs on supply chain quality input and pricing. The research shows that the change of quality effort cost is an important variable that affects the supply chain operation decision. When the player of high-quality effort cost is dominant in the supply chain, the quality effort input, sales price, leading player's income and the total profit of the supply chain are more favorable, and followers of low-quality effort costs can also use the cost advantage to obtain higher profits than when they are the leader. In addition, regardless of whether it is the leadership of a mobile phone manufacturer or a telecommunications operator, a cost-sharing contract can distribute the profits of the supply chain more reasonably, so compared with a wholesale price contract, a cost-sharing contract can improve the quality of mobile phones and services and the profit of each player. The quality of mobile phones, quality of services, sales prices and the profits of various players are all negatively affected by the cost coefficient of mobile phone quality efforts and the cost coefficient of service quality efforts, and positively affected by consumers' sensitivity to quality and the degree of complementarity between products and services. Moreover, complementarity also plays an important role in the change of the leading players.

Key words

bundling / contract mobile phone / quality of mobile phone / quality of service / cost sharing

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CAO Yu , YANG Xilong , WU Kan. Research on operation decision of bundling supply chain of mobile phone and telecom service. Systems Engineering - Theory & Practice, 2021, 41(4): 919-931 https://doi.org/10.12011/SETP2019-2878

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Funding

National Natural Science Foundation of China (71802076, 71972182); Hunan Province Science Foundation for Distinguished Youth (2020JJ2051); Hunan Province Education Science “13th Five-Year Plan” Key Funding (XJK20AGD010)
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