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Optimal contract strategies for two stage supply chain

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  • Sana, Shib Sankar

Abstract

The present article investigates the issue of channel coordination of a manufacturer and a retailer facing stochastic demand that is sensitive to promotional effort. In newsvendor setting, the return policy, sharing contract on promotional effort, and discount on whole sales price provided by the manufacturer have been shown to be able to align incentives of the members of the chain. An analytical method has been provided to determine the optimal contract parameters of the channel. Numerical examples are also illustrated to justify the model.

Suggested Citation

  • Sana, Shib Sankar, 2013. "Optimal contract strategies for two stage supply chain," Economic Modelling, Elsevier, vol. 30(C), pages 253-260.
    • Handle: RePEc:eee:ecmode:v:30:y:2013:i:c:p:253-260
    DOI: 10.1016/j.econmod.2012.09.011
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    References listed on IDEAS

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    Cited by:

    1. Xu, Qi & Fu, Guanghua & Fan, Dandan, 2020. "Service sharing, profit mode and coordination mechanism in the Online-to-Offline retail market," Economic Modelling, Elsevier, vol. 91(C), pages 659-669.
    2. Bo Yan & Jiwen Wu & Zijie Jin & Shiyou He, 2020. "Decision-making of fresh agricultural product supply chain considering the manufacturer’s fairness concerns," 4OR, Springer, vol. 18(1), pages 91-122, March.
    3. Cárdenas-Barrón, Leopoldo Eduardo & Sana, Shib Sankar, 2014. "A production-inventory model for a two-echelon supply chain when demand is dependent on sales teams׳ initiatives," International Journal of Production Economics, Elsevier, vol. 155(C), pages 249-258.
    4. Hrabec, Dušan & Kučera, Jiří & Martinek, Pavel, 2023. "Marketing effort within the newsvendor problem framework: A systematic review and extensions of demand-effort and cost-effort formulations," International Journal of Production Economics, Elsevier, vol. 257(C).
    5. Xiaoguang Liu & Xifu Wang & Lufeng Dai & Yanfang Pan, 2018. "Research on supply chain performance based on retailers’ fairness concerns: Wholesale prices versus cost sharing of efforts," PLOS ONE, Public Library of Science, vol. 13(10), pages 1-31, October.
    6. Fezzeh Abanavaz & Morteza Khakzar Bafruei, 2020. "Investigating the Return of Goods in Supply Chain," International Review of Management and Marketing, Econjournals, vol. 10(4), pages 170-176.
    7. He, Yong & Zhang, Peng & Yao, Yuliang, 2014. "Unidirectional transshipment policies in a dual-channel supply chain," Economic Modelling, Elsevier, vol. 40(C), pages 259-268.
    8. Fezzeh Abanavaz & Morteza Khakzar Bafruei, 2020. "Studying a Two-level Supply Chain Including a Manufacturer and Several Retailers with a Wholesale Price Contract between Them," International Review of Management and Marketing, Econjournals, vol. 10(5), pages 165-171.
    9. Samuel N. Kirshner & Zhaolin Li, 2022. "Supply chain contracting with competing regretful retailers," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(6), pages 2196-2211, September.
    10. Mina Nouri & Seyyed-Mahdi Hosseini-Motlagh & Mohammadreza Nematollahi, 2021. "Proposing a discount policy for two-level supply chain coordination with periodic review replenishment and promotional efforts decisions," Operational Research, Springer, vol. 21(1), pages 365-398, March.

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