Channel coordination and quantity discounts
Article Abstract:
A model is developed to examine how channel coordination is affected by joint decision policies in a setting where there is a supplier and a buyer or a supplier and a group of homogeneous buyers. Quantity accounts and franchise fees are used to coordinate the joint decision policy characterized by the unit selling price and the order quantity. The study investigates the role and limitation of quantity discounts in channel coordination. Specifically, it examines the impact of concurrently addressing two alternative motivations for providing quantity discounts, boosting demand and ensuring pareto-efficient transactions. Results indicate that the optimal all-unit quantity discount policy and the optimal incremental quantity discount policy perform equally in achieving channel coordination.
Publication Name: Management Science
Subject: Business, general
ISSN: 0025-1909
Year: 1995
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Quick response in manufacturer-retailer channels
Article Abstract:
Quick Response (QR) time is a strategy used by the apparel industry to shorten lead time. Retailers have the ability to adjust orders based on better demand information under the strategy. QR can effect a significant reduction in forecast error. However, QR may not always be effective for manufacturers and retailers, especially manufacturers. Both sectors may thus have to be required to perform activities to make QR Pareto improving. Service level commitment, wholesale price commitments and volume commitments may be manipulated to make QR profitable for both members of the channel. Issues for further research include the effect of competition between manufacturers and retailers, the role of manufacturer-retailer relationships under QR and the impact of multiple selling seasons.
Publication Name: Management Science
Subject: Business, general
ISSN: 0025-1909
Year: 1997
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Managing supply chain demand variability with scheduled ordering policies
Article Abstract:
An empirical model for assessing supply chain operations was developed in an effort to evaluate the impact of scheduled ordering policies on demand variability. By assuming that an N number of retailers manifest stochastic demand, it was shown that backorder and supply chain costs may significantly be reduced by balancing order intervals. The same result is achieved when a particular retailer switches from a synchronized scheme to a balanced order interval. Results further prove that a supplier's demand variance may be minimized by initiating a flexible quantity strategy which increased the chances of acquiring a high fill rate. Efforts to dampen supplier demand may only be applied when a supplier's cost is accurately represented in the overall suppliers cost.
Publication Name: Management Science
Subject: Business, general
ISSN: 0025-1909
Year: 1999
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