T paper studies a buyer’s procurement strategies in a two-stage supply chain with price-sensitive demand. The buyer procures a product from a supplier and then sells to the marketplace. Market demand is stochastic and depends on the buyer’s selling price. The supplier’s production cost is private information, and the buyer only knows the distribution of the cost. Both the buyer and the supplier...

This paper studies a buyer’s procurement strategies in a two-stage supply chain with price-sensitive demand. The buyer procures a product from a supplier and then sells to the marketplace. Market demand is stochastic and depends on the buyer’s selling price. The supplier’s production cost is private information, and the buyer only knows the distribution of the cost. Both the buyer and the suppl...

We study competition and coordination in a supply chain in which a single supplier both operates a direct channel and sells its product through multiple differentiated retailers competing in quantities. We study analytically the supply chain with symmetric retailers and find that the supplier generally prefers to have as many retailers as possible in the market, even if the retailers’ equilibri...

The \double-marginalization" problem associated with linear wholesale price contract has long been recognized as a threat to vertical channel coordination. Many solutions involving more complex contract formats have been proposed to address this problem. Extant economic theories predict these solutions to be revenue and division equivalent in that they all restore full channel e±ciency and give...

In a supply chain with product outsourcing, it is crucial to identify which firm implements corporate social responsibility (CSR) leads higher CSR effort level, quality quantity of outsourced products, and profits for members. response this question, we consider decentralized an upstream contract manufacturer (CM) downstream original equipment (OEM). relationship, the OEM outsources CM determin...

Previous ordering cost reduction vendor–buyer inventory models with backorder price discount usually assumed that the buyer must pay to the vendor for the ordered items as soon as the items are received, the received quantity is same as the ordered quantity and the transportation cost is independent of the shipment lot-size. In practice, however, the vendor is willing to offer the buyer a certa...

An all-units discount is a price reduction applied to all units purchased if the customer’s total purchases equal or exceed a given quantity threshold. Since the discount is paid on all units rather than marginal units, the tariff is discontinuous and exhibits a negative marginal price (“cliff”) at the threshold that triggers the discount. This paper shows that all-units discounts arise in opti...

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...

The article analyzes network effects on the German GSM mobile telephony market. The authors use an ACE-approach to examine how a new competitor can successfully gain ground in the market with a discount-pricing strategy. In particular they study the impact of several elements of a mobile phone contract like on-net-, landlineor off-net-fees on the competitor’s market share. It turns out that it ...