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Profit Sharing Model in Product-Service System  

Kim, Jin-Min (고려대학교 경영대학)
Park, Jin-Soo (고려대학교 경영대학)
Park, Kwang-Tae (고려대학교 경영대학)
Kim, Kwang-Jae (포항공과대학교 산업경영공학과)
Hong, Yoo-Suk (서울대학교 산업공학과)
Publication Information
Journal of the Korean Operations Research and Management Science Society / v.36, no.4, 2011 , pp. 81-89 More about this Journal
Abstract
In recent business environments, the competition among firms is shifting from the competition based on individual firm only to the competition based on alliance of firms. This is because it is not easy for a firm to perform all functions which consumers want. Thus, it is more effective to combine core competencies of different firms based on a strategic partnership. It is essential to establish a strategic partnership and this strategic partnership is a key success factor in PSS(Product-Service System) which combines products and services. In this paper, we propose a profit sharing model for PSS partnership. We first analyze customer's utility using Cobb-Douglas utility function and then propose the PSS profit sharing ratio considering functionalities and cost structures based on the combination ratio of PSS. This paper helps firms to develop partnership strategies for PSS.
Keywords
PSS; Utility Function; Profit Sharing; Partnership;
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