Title: Analysis of Return Policy Contracts with Warranty
Speaker: Dr. Shirsendu Nandi, Faculty member, Greatlakes Institute of Management, Chennai.
Day, Date & Time: Wednesday, 4th March 2020, at 2.30 PM
Venue: Seminar Hall (2nd Floor, IEOR Building)
Abstract:
The present research explores the coordination mechanism through warranty period optimization among a possible set of warranty lengths when buyback contract and quantity flexibility contract are implemented. It analyses the relationship among different decision variables and deals with two cases i) when the manufacturer solely bears the warranty cost, ii) when there is a sharing of warranty cost between the manufacturer and the retailer. The study conducts numerical analysis assuming an additive demand distribution one part of which is a nonlinear warranty dependent demand function and the other part of which follows a statistical distribution. The numerical analysis is carried out with respect to a set of values of the exogenous parameters and assuming that the stochastic part of the demand follows a uniform, normal or exponential distribution. Sensitivity analysis is also carried out to investigate the effect of change in the parameter such as mean, standard deviation of the demand distribution on the optimal order quantity, optimal warranty length, supply chain profit and supply chain risk. It also carries out a sensitivity analysis with respect to the exogenous parameters individually to explore the impact of change in cost of production and average warranty cost, retail price, parameters of the warranty dependent demand function on the optimal order quantity, optimal warranty length, supply chain profit and supply chain risk.
The present study determines the risk expressions for the retailer, manufacturer and the entire supply chain in case of buyback contract, quantity flexibility contract in conjunction with warranty. Risk is measured by calculating the variances in absolute profits of the respective parties in the supply chain. It also investigates the effect of change in order quantity on the risks borne by the manufacturer, the retailer and the total supply chain while the warranty length is kept optimal. Similar investigation is performed to examine the impact of change in warranty length upon the risks borne by the manufacturer, the retailer and the total supply chain keeping the order quantity optimal. The study also examines how the solution of the centralised system is affected when the supply chain is risk-averse in nature. It also provides an example and guideline for the coordinator of the supply chain to design the contract parameters and set the decision variables in a manner such that the channel coordination is achieved by satisfying the risk constraints of both the parties as well as of the entire supply chain.
The study examines the necessity of aligning the quality decision, warranty policy and production level of a supply chain by investigating the impact of quality improvement of the product on the optimal order quantity, optimal warranty length, optimal supply chain profit and profits of both the parties of the supply chain. The study also provides a guideline to recoordinate the supply chain by redesigning the contract parameters after the quality development of the product in case of buyback contract and quantity flexibility contract.
Speaker Bio:
Dr. Shirsendu Nandi is currently a faculty member at Greatlakes institute of Management Chennai.He worked for 5 years as a faculty member in the area of operations in Indian Institute of Management Rohtak. He was the chairperson of Operations Management area and chairperson for executive education and certificate programmes. Dr. Nandi is FPM (Fellow in Management) from Indian Institute of Management Indore. He also holds Master of Science in mathematics from IIT Kharagpur. He has done his Bachelor of Science in mathematics from Presidency college under University of Calcutta. He is the recipient of prestigious N.B.H.M (National Board for Higher Mathematics) Scholarship awarded by Department of Atomic Energy, Govt. of India. He has worked for two years with Wipro Technologies in the area of business intelligence. He has guided PhD students and published in various international journals of repute. He has conducted multiple MDPs and short term certificate programmes on Project Management, Data Analytics, Quality Management, Excellence in Operations for industry participants and other audience. His teaching interests include subjects like Quantitative Methods, Business Statistics, Advanced Probability and Stochastic Process, Supply Chain Management, Operations Management, Advanced Optimization, Managerial Economics etc. His research interests include Supply chain contracts, Supply chain coordination, Supply chain modelling and network design, Mathematical model building for supply chain and operations related problems.