Distribution contracts to support optimal inventory holdings under demand uncertainty

Marvel, Howard P.; Wang, Hao

doi:10.1016/j.ijindorg.2009.02.003

Cited by 5 publications

(4 citation statements)

References 12 publications

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“…under aggregate demand uncertainty, e.g., Deneckere, Marvel and Peck (1996), Dana and Spier (2001), and Marvel and Wang (2009). The studies show how vertical integration corrects the distortion caused by demand uncertainty.…”

Section: Industrial Organization Theorists Have Paid Considerable Attmentioning

confidence: 88%

On the Vertical Structure of a Competitive Electricity Market

Wang

2010

SSRN Journal

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Section: Industrial Organization Theorists Have Paid Considerable Attmentioning

confidence: 88%

On the Vertical Structure of a Competitive Electricity Market

Wang

2010

SSRN Journal

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“…1996, Butz 1997, Deneckere et al. 1997, Krishnan and Winter 2007, Marvel and Wang 2007, Marvel and Wang 2009). Several papers in the operations management literature also looked into the impacts of RPM on a two‐stage supply chain.…”

Section: Literature Reviewmentioning

confidence: 99%

“…For such a two-stage supply chain, minimum RPM is deemed not effective in reducing the effect of double marginalization or in improving channel profit (Rey 2012). Rather, minimum RPM is best understood as an instrument used by an upstream supplier in a two-stage supply chain with competitive downstream market to coordinate the channel (e.g., Klein and Murphy 1988, Deneckere et al 1996, Butz 1997, Deneckere et al 1997, Krishnan and Winter 2007, Marvel and Wang 2007, Marvel and Wang 2009. Several papers in the operations management literature also looked into the impacts of RPM on a two-stage supply chain.…”

Section: Literature Reviewmentioning

confidence: 99%

The Effect of List Price on Channel Performance with Consignment

Fang

Wang

2021

Production and Operations Management

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Motivated by the newest contract offered by Amazon.com, called the Advantage Program, we study a supply chain where a retailer offers a vendor‐managed inventory with consignment contract to n suppliers for selling their products. A key parameter in the contract is the product list price that the retailer allows each supplier to choose for its own product. The retailer then sets the retail price of each product at or below its list price for selling it to the market and remits its supplier an amount equal to a prespecified percentage of its list price on each unit sold. Two alternative consignment contracts are also considered with only one deviation where the retailer chooses the retail price of each product freely, or the retailer sets the retail price of each product at or above its list price. We show that the supplier’s list price plays a major role in determining firms’ decisions and performance in equilibrium. In particular, we find that by committing the retail price of each product to not exceeding the list price set by its supplier, the retailer can improve its own performance and the channel performance without hurting each supplier.

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“…In contrast, return policies(Marvel and Peck, 1995;Marvel and Wang, 2007) or revenue sharing schemes(Dana and Spier, 2001;Marvel and Wang, 2009), which do not preclude price dispersion, should do better in dealing with demand uncertainty.C 2018 Board of Trustees of the Bulletin of Economic Research and John Wiley & Sons Ltd…”

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confidence: 99%

On the Profitability of Resale Price Maintenance When Demand Is Uncertain

Wang

2018

Bulletin of Econ Res

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A previous study finds that in a market where a manufacturer faces uncertain demand and sells to consumers through competitive retailers, the manufacture wishes to support adequate retail inventories by imposing resale price maintenance (RPM). I show that if retail inventories are allocated to consumers through first‐come‐first‐served rule rather than efficient rationing rule in the game with unconstrained retail competition, imposing RPM may not be profitable. It may not encourage more retail inventories either. RPM may also lower consumer surpluses and social welfare. This study casts some doubt on the demand uncertainty theory that supports RPM.

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Distribution contracts to support optimal inventory holdings under demand uncertainty

Cited by 5 publications

References 12 publications

On the Vertical Structure of a Competitive Electricity Market

On the Vertical Structure of a Competitive Electricity Market

The Effect of List Price on Channel Performance with Consignment

On the Profitability of Resale Price Maintenance When Demand Is Uncertain

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