Implicit Understandings in Channels of Distribution

Article Abstract:

Formal agreements can be used to achieve coordination among channel members. These agreements work by exerting explicit control over the members who make the agreements. However, implicit understandings can be used as a partial substitute for more formal agreements. In this paper, we show that implicit understandings can develop as channel members learn about each other's behavior. We show that ... This learning leads to the use of the implicit influence each channel member has over the other's behavior. The learning leading to an implicit understanding requires some form of experimentation or historical observation. This learning results in an oscillating retail price. When only one channel member learns the other's behavior, both channel members obtain greater profits than when neither member learns, and both channel members obtain less profits than when both members learn. However, the member who does not learn obtains more profits than the member who learns. We also show that ... implicit understandings result in greater channel profits that in their absence; Implicit understandings cannot fully substitute for an explicit contract. Implicit understandings result in a retail price which is higher than the price resulting from an explicit contract but lower than the price resulting in the absence of an implicit understandings. Implicit understandings develop as channel members learn each other's behavior. We demonstrate that the form of learning discussed in this paper is consistent with a somewhat general demand function. Finally, the paper provides some examples of both symmetrical learning, where both channel members learn at the same speed and asymmetrical learning where channel members learn at different speeds. (Reprinted by Permission of Publisher.)

Profits, Marketing, Contracts, Monopolies, Learning Curve, Price, Profit, Cooperation

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An Analysis of Network Location Problems with Distance Constraints

Article Abstract:

A class of network location problems with distance constraints is discussed. Constraints include both minimum and maximum separations. Existing solution techniques are surveyed. Integer programming models and linear programming relaxation methods are used to solve new problems. A table of decision criteria for network locations is included. Another table categorizes network location problems with linear programming results for some median problems with distance constraints.

Business planning, Network analyzers, LAN Monitor, Models, Network Models

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Identifying Redundant Constraints and Implicit Equalities in Systems of Linear Constraints

Article Abstract:

Redundant constraints can be omitted from a system of linear constraints and implicit equalities can be replaced by equalities without changing the feasible region. Theorems that identify these two constraints are presented. Identification of all redundant constraints and all implicit equalities is possible by two methods. Computational results are presented in tables.

Modeling, Data modeling software, Mathematical Programming, Operations Research, Theory

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