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Article: Some properties of buyback and other related schemes in a newsvendor-product supply chain with price-sensitive demand
Title | Some properties of buyback and other related schemes in a newsvendor-product supply chain with price-sensitive demand |
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Authors | |
Keywords | Buyback Channel coordination Newsvendor product Resale price maintenance Supply chain |
Issue Date | 2007 |
Publisher | Palgrave Macmillan Ltd. The Journal's web site is located at http://www.palgrave-journals.com/jors/index.html |
Citation | Journal Of The Operational Research Society, 2007, v. 58 n. 4, p. 491-504 How to Cite? |
Abstract | A manufacturer wholesaling to a retailer a 'newsvendor-type' product such as a seasonal/fashion good or a perishable food item is considered here. It is known that such a manufacturer/retailer channel has difficulties in fully realizing the market's profit potential. We study a theoretical construct of such a channel and present practically useful results for a manufacturer trying to design more profitable pricing schemes. Specifically, we consider a 'dominant' manufacturer supplying a newsvendor-type product to a retailer. The retail market volume varies with the unit retail price according to a stochastic demand curve. We study the design and performance of 'price-only', 'buyback' and 'manufacturer-imposed retail price' schemes. All these schemes have been considered in earlier works. The first part of this paper studies some important but previously overlooked aspects of price-only and buyback schemes. We show that the performance of these schemes is strongly and somewhat counter-intuitively affected by the specific form of demand curve and of demand randomization. Thus, we identify hitherto neglected factors that must be carefully considered when designing pricing schemes for actual implementation. The second part of this paper demonstrates the practicality and merit of using buyback in conjunction with a manufacturer-imposed retail price - an arrangement overlooked in the literature because it is widely mistaken as illegal. Overall, the paper shows how a manufacturer can better realize the market's potential by: (i) modifying slightly the well-known buyback arrangement; and (ii) carefully modelling certain hitherto neglected aspects of the price/demand relationship - a conclusion quite contrary to what one might surmise from the current theoretical literature. |
Persistent Identifier | http://hdl.handle.net/10722/85812 |
ISSN | 2023 Impact Factor: 2.7 2023 SCImago Journal Rankings: 1.045 |
ISI Accession Number ID | |
References |
DC Field | Value | Language |
---|---|---|
dc.contributor.author | Lau, AHL | en_HK |
dc.contributor.author | Lau, HS | en_HK |
dc.contributor.author | Wang, JC | en_HK |
dc.date.accessioned | 2010-09-06T09:09:32Z | - |
dc.date.available | 2010-09-06T09:09:32Z | - |
dc.date.issued | 2007 | en_HK |
dc.identifier.citation | Journal Of The Operational Research Society, 2007, v. 58 n. 4, p. 491-504 | en_HK |
dc.identifier.issn | 0160-5682 | en_HK |
dc.identifier.uri | http://hdl.handle.net/10722/85812 | - |
dc.description.abstract | A manufacturer wholesaling to a retailer a 'newsvendor-type' product such as a seasonal/fashion good or a perishable food item is considered here. It is known that such a manufacturer/retailer channel has difficulties in fully realizing the market's profit potential. We study a theoretical construct of such a channel and present practically useful results for a manufacturer trying to design more profitable pricing schemes. Specifically, we consider a 'dominant' manufacturer supplying a newsvendor-type product to a retailer. The retail market volume varies with the unit retail price according to a stochastic demand curve. We study the design and performance of 'price-only', 'buyback' and 'manufacturer-imposed retail price' schemes. All these schemes have been considered in earlier works. The first part of this paper studies some important but previously overlooked aspects of price-only and buyback schemes. We show that the performance of these schemes is strongly and somewhat counter-intuitively affected by the specific form of demand curve and of demand randomization. Thus, we identify hitherto neglected factors that must be carefully considered when designing pricing schemes for actual implementation. The second part of this paper demonstrates the practicality and merit of using buyback in conjunction with a manufacturer-imposed retail price - an arrangement overlooked in the literature because it is widely mistaken as illegal. Overall, the paper shows how a manufacturer can better realize the market's potential by: (i) modifying slightly the well-known buyback arrangement; and (ii) carefully modelling certain hitherto neglected aspects of the price/demand relationship - a conclusion quite contrary to what one might surmise from the current theoretical literature. | en_HK |
dc.language | eng | en_HK |
dc.publisher | Palgrave Macmillan Ltd. The Journal's web site is located at http://www.palgrave-journals.com/jors/index.html | en_HK |
dc.relation.ispartof | Journal of the Operational Research Society | en_HK |
dc.rights | Journal the of Operational Research Society. Copyright © Palgrave Macmillan Ltd. | en_HK |
dc.subject | Buyback | en_HK |
dc.subject | Channel coordination | en_HK |
dc.subject | Newsvendor product | en_HK |
dc.subject | Resale price maintenance | en_HK |
dc.subject | Supply chain | en_HK |
dc.title | Some properties of buyback and other related schemes in a newsvendor-product supply chain with price-sensitive demand | en_HK |
dc.type | Article | en_HK |
dc.identifier.openurl | http://library.hku.hk:4550/resserv?sid=HKU:IR&issn=0160-5682&volume=58&issue=4&spage=491&epage=504&date=2007&atitle=Some+properties+of+buyback+and+other+related+schemes+in+a+newsvendor-product+supply+chain+with+price-sensitive+demand | en_HK |
dc.identifier.email | Lau, AHL: ahlau@business.hku.hk | en_HK |
dc.identifier.email | Wang, JC: wangjc@business.hku.hk | en_HK |
dc.identifier.authority | Lau, AHL=rp01072 | en_HK |
dc.identifier.authority | Wang, JC=rp01107 | en_HK |
dc.description.nature | link_to_subscribed_fulltext | - |
dc.identifier.doi | 10.1057/palgrave.jors.2602167 | en_HK |
dc.identifier.scopus | eid_2-s2.0-33947389606 | en_HK |
dc.identifier.hkuros | 137937 | en_HK |
dc.relation.references | http://www.scopus.com/mlt/select.url?eid=2-s2.0-33947389606&selection=ref&src=s&origin=recordpage | en_HK |
dc.identifier.volume | 58 | en_HK |
dc.identifier.issue | 4 | en_HK |
dc.identifier.spage | 491 | en_HK |
dc.identifier.epage | 504 | en_HK |
dc.identifier.isi | WOS:000245075500009 | - |
dc.publisher.place | United Kingdom | en_HK |
dc.identifier.scopusauthorid | Lau, AHL=7202626080 | en_HK |
dc.identifier.scopusauthorid | Lau, HS=36942855500 | en_HK |
dc.identifier.scopusauthorid | Wang, JC=15838282400 | en_HK |
dc.identifier.citeulike | 1185115 | - |
dc.identifier.issnl | 0160-5682 | - |