Based on master-slave two-echelon supply chain, set a separate price for product extended warranty, and form both a product reflecting the risk avoidance by the customer and the demand function for product extended warranty. Study how service level tends to influence double marginal effect and complementary effect of the supply chain. And further analyze how service level tends to influence the sale mode choice of product extended warranty by the manufacturer and provide theories on the

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... making for the manufacturer. 11 manufacturer to select sales mode under R mode while he warranty level is high, it is beneficial for the manufacturer to select sales mode under M mode. So the manufacturer should consider fully the above cathartic to provide the proper extended warranty level instead of blindly raising costs which reduce profits. As to the mode selection, based on a variety of factors such as own ability and the quality of the products, the manufacturer shall select the appropriate mode to sell their extended warranty within the scope they can provide to maximize profit.