Inventory and Eort Choice When a Sales Agent Possesses Private Demand Information

Topics:
Sales Force Design
Tags:
Agent,
Business Operations,
Principal,
Product,
Real Estate,
Sales,
Sales Strategy,
University Of Rochester
Source:
University of Rochester

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Overview: The inventory planning decision of a firm (principal) is considered in the situation where a sales agent possesses better information about future product demand than the principal. This could occur simply because the agent has more familiarity with the customers than the principal, giving him a better signal of demand. This is especially plausible where the new product is similar to a previous product and/or the new product is a substitute for a previous product. Because the agent has an established relationship with many if not most of the potential clients, he is likely to have better knowledge of true demand for a new product.

(Is this item miscategorized? Does it need more tags? Let us know.)

Format: PDF | Size: 105KB | Date: May 2005 | Pages: 6


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