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Service Charge in VMI Systems

Author

Listed:
  • Arqum Mateen

    (Indian Institute of Management Kozhikode)

  • Ashis K. Chatterjee

    (Indian Institute of Management Calcutta)

Abstract

This study investigates the role of the per unit payment made by the retailers to the manufacturer in VMI systems for managing their respective inventories. Hitherto, this has been assumed to be exogenously provided. It is shown that the manufacturer can use it to extract additional profit from the retailers. Implications of this charge have been investigated in both uniform pricing as well as retailer specific pricing scenarios. Various options available to the retailers in order to safeguard their respective interests have been discussed.

Suggested Citation

  • Arqum Mateen & Ashis K. Chatterjee, 2017. "Service Charge in VMI Systems," Working papers 230, Indian Institute of Management Kozhikode.
    • Handle: RePEc:iik:wpaper:230
    as

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    File URL: https://iimk.ac.in/websiteadmin/FacultyPublications/Working%20Papers/230abs.pdf?t=29
    File Function: First version, 2016
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