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In this paper, we investigate the issue of how to coordinate a supply chain for a newsvendor-type product where demand is sensitive to both retail price and sales effort. Most related studies have shown that many of the well-known “channel coordination” contracts will fail in such a with-effort supply chain. To remedy this situation, we propose a continuous “volume discount” schedule which not only...
In this paper, we investigate the performance of discount pricing policies as coordination mechanisms in decentralized channels where demand is sensitive to both price and sales effort. Most related studies have shown that volume discount is an effective channel coordination device. However, our paper shows that, when demand is affected by both price and sales effort, regular volume discount not only...
“Slotting fee” (hereafter “SF”) is an upfront fee a “supplier” is required to pay the retailer in order to have his product sold on the retailer's shelves. It is becoming increasingly common, but also widely reviled. The question we pose is: given that a Stackelberg-dominant retailer of a newsvendor product has to choose a pricing contract with which she transacts with the supplier, how would the...
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