Practical and effective contracts for the dominant retailer of a newsvendor product with price-sensitive demand
| Autor: | Hon-Shiang Lau, Amy Hing-Ling Lau, Jian-Cai Wang |
|---|---|
| Rok vydání: | 2012 |
| Předmět: |
Economics and Econometrics
Markup language media_common.quotation_subject Production cost Management Science and Operations Research Newsvendor model General Business Management and Accounting Industrial and Manufacturing Engineering Unit (housing) Product (business) Microeconomics Extended newsvendor model Business Function (engineering) Lump sum media_common |
| Zdroj: | International Journal of Production Economics. 138:46-54 |
| ISSN: | 0925-5273 |
| DOI: | 10.1016/j.ijpe.2011.12.019 |
| Popis: | A manufacturer supplies a newsvendor product to a dominant retailer, who does not know the manufacturer's unit production cost k . The expected retail demand is a function of the unit retail price p . For this increasingly prevalent but rarely analyzed scenario, we compare the performance of several promising contract formats, including two new contract formats designed explicitly for a dominant retailer to implement, namely: (i) a retailer-implemented two-part tariffs where the retailer charges an upfront lump sum fee besides a fixed percentage markup over any given unit wholesale price, and (ii) a retailer-implemented volume discount scheme. We show that these two new formats perform substantially better than the currently-used practical formats. Thus, they form a basis for a dominant retailer to design a practical and effective purchase contract that approaches the power of the theoretically-optimal but impractical “menu of contracts.” |
| Databáze: | OpenAIRE |
| Externí odkaz: |
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