We study a supply chain consisting of an upstream supplier who invests in innovation, which increases the value of products to end users, and downstream manufacturers who sell to end users. We analyze the supplier’s optimal innovation decision and show that the supplier’s optimal innovation level is higher with the wholesale price contract than with bilateral bargaining. Moreover, with the whol...

W incorporate the concept of fairness in a conventional dyadic channel to investigate how fairness may affect channel coordination. We show that when channel members are concerned about fairness, the manufacturer can use a simple wholesale price above her marginal cost to coordinate this channel both in terms of achieving the maximum channel profit and in terms of attaining the maximum channel ...

T coordination of supply chains by means of contracting mechanisms has been extensively explored theoretically but not tested empirically. We investigate the performance of three commonly studied supply chain contracting mechanisms: the wholesale price contract, the buyback contract, and the revenue-sharing contract. The simplified setting we consider utilizes a two-echelon supply chain in whic...

This paper develops a dynamicmodel in a one-supplier-one-retailer fresh agricultural product supply chain that experiences supply disruptions during the planning horizon.The optimal solutions in the centralized and decentralized supply chains are studied. It is found that the retailer’s optimal order quantity and the maximum total supply chain profit in the decentralized supply chain with whole...

It is common for a retailer to sell products from competing manufacturers. How then should the …rms manage their contract negotiations? The supply chain coordination literature focuses either on a single manufacturer selling to a single retailer or one manufacturer selling to many (possibly competing) retailers. We …nd that some key conclusions from those market structures do not apply in our s...

a r t i c l e i n f o JEL classification: D82 D83 Q49 L11 L12 L94 Keywords: Price pass-through Norwegian electricity market Price asymmetry Market power Transmission lag In this paper we estimate the pass-through of wholesale electricity price to the end consumer price with variable price contracts in the Norwegian electricity market using weekly data. We find substantial asymmetry when retaile...

The main purpose of this paper is to study the inventory, production, and contracting decisions of a multi-echelon supply chain with both demand and supply uncertainty. We find that the commonly used wholesale price contracts used by both up-stream and downstream supply-chain members cannot coordinate the system. We then propose a returns policy used by the manufacturer and the retailer, combin...

Producers in a perfectly competitive industry compete to obtain shelf space at the retail level. Barring contract observability problems, slotting allowances are observed in equilibrium. Producers charge a high wholesale price, but give back their profits via up-front payments to retailers. However, if the individual supplier retailer wholesale price terms are unobservable by competitors, then ...

Integrated device manufacturers (IDMs) and foundries are two types of manufacturers in the semiconductor industry. IDMs integrate both design and manufacturing functions while foundries solely focus on manufacturing. Since foundries often have cost advantage over IDMs due to their specialization and economies of scale, IDMs have incentives to source from foundries for the purpose of avoiding ex...