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Many retailers and manufacturers issue “free” gift cards to consumers who purchase qualifying products. These gift cards are paid for by the retailer or manufacturer and redeemed on certain products at the retailer. We develop a decentralized two‐product supply chain in which the retailer is a Stackelberg leader. We analyze three models: no gift cards, manufacturer‐sponsored gift cards, and retailer‐sponsored...
This paper builds a two-stage game supply chain model where a manufacturer and a retailer transact via a wholesale price contract. Based on a standard wholesale price contract, the model captures the manufacturer's product recall decisions under product liability regulations. With the subgame perfect equilibrium, the comparative statics results show that (1) the manufacturer's product recall decision...
This paper tries to build a three-stage game model between a supplier and a manufacturer in a supply chain with a wholesale price contract, so as to describe how the manufacturer and the supplier strategically interact. Further, via analyzing the equilibrium, it studies the impacts of the change in the futures price on the transmission of demand risk (variance) in supply chains (i.e. how the futures...
The effect of return on price and profit of manufacturers and retailers in chain to chain competition is examined under uncertainty yielding several new and important conclusions. First, within certain range of demand uncertainty, the return policy is win-win for manufacturers and retailers, and improves efficiency of the whole supply chain. As the intensity of competition increases, the win-win range...
This paper examines the ordering dynamics in a supply chain coordinated by pure revenue-sharing contracts by relaxing the complete rationality assumption in the literature. Analytical results demonstrate that the retailer's ordering dynamics exhibits chaos with a positive (Lebesgue) measure in the long term no matter what percentage is adopted in a pure revenue-sharing contract as long as certain...
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