We develop an option model to quantify and price a flexible supply contract, by which the buyer (a manufacturer), in addition to a committed order quantity, can purchase option contracts and decide whether or not to exercise them after demand is realized. We consider both call and put options, which generalize several widely practiced contracting schemes such as capacity reservation and buy-bac...

We investigate how a supply chain, formed by a risk-neutral supplier and a riskaverse retailer, can be coordinated with a supply contract. We demonstrate that the standard wholesale, buy-back or revenue-sharing contracts do not coordinate such a channel. We propose a definition of coordination of the supply chain, and design an easy-to-implement risk-sharing contract that offers the desired dow...

When the online stores and the logistics service providers make decision alone, as trade off phenomenon exists, inventory costs achieve the minimum while transportation costs are not the minimum or the opposite situation occurs. When implementing inventory and transportation integrated optimization, the profit of the whole supply chain and the stores increases, while the profit of the logistics...

This paper analyzes the implications of contractual innovation in vertically-separated industries, using the example of the video rental industry. Prior to 1998, video stores obtained inventory from movie distributors using simple linear pricing contracts. In 1998, revenue-sharing contracts were widely adopted. I investigate the effect of using revenue-sharing contracts on firms’ profits and co...

<p style='text-indent:20px;'>In this article, a three-echelon closed-loop supply chain is considered under sustainability consideration through remanufacturing of waste materials. Depending upon quality, the collector collects used products and forwards to manufacturer for remanufacturing. The offers reward or incentive consumers influence them return items. shortfall amount collected ite...

Predictive pricing (e.g., Google’s “Smart Pricing” and Yahoo’s “Quality-Based Pricing”) and revenue sharing are two important tools that online advertising networks can use in order to attract content publishers and advertisers. We develop a simple model of the pay-per-click advertising market to study the market effects of these tools. We then present an algorithm, PricingPolicy, for computing...

We study how interactions between financing and investment decisions can shape firm boundaries in dynamic product markets. In particular, we model a new product market opportunity as a growth option and ask whether it is best exploited by a large incumbent firm (Integration) or by a separate, specialized firm (Non-Integration). Starting from a standard theoretical framework, in which value-maxi...

When an innovative product is introduced into the market, consumers are often uncertain about the product value. Over time they may learn the value of product. This paper studies the impact of consumer learning on the firms' marketing efforts and revenue sharing strategies in a supply chain that sells an innovative product to consumers over multiple periods. Both the supplier and the retailer c...

This study examines the incentives for content contribution in social media. we propose that exposure and reputation are the major incentives for contributors. Besides, as more and more social media web sites offer advertising-revenue sharing with some of their contributors, shared revenue provides an extra incentive for contributors who have joined revenue-sharing programs. we develop a dynami...