Strategic Customer Behavior, Commitment, And Supply Chain Performance
- Topics:
- Inventory Management,
- Supplier Evaluation
- Tags:
- Enterprise Software,
- Sales,
- Sales Strategy,
- Seller,
- Software,
- Supply Chain,
- Supply Chain Management (SCM)
- Source:
- University of California
FREE Registration is required
Overview: This paper studies the impact of strategic customer behavior on supply chain performance. We start with a newsvendor seller facing forward-looking customers. The seller initially charges a regular price but may salvage the leftover inventory at a lower salvage price after random demand is realized. Customers anticipate future sales and choose purchase timing to maximize their expected surplus. We characterize the Rational Expectations (RE) equilibrium, where we find that the seller's stocking level are lower than that in the classic model without strategic customers. We show that the seller's profit can be improved by promising that: either quantities available will be limited (quantity commitment) or prices will be kept high (price commitment).
(Is this item miscategorized? Does it need more tags? Let us know.)
Format: PDF | Size: 414KB | Date: Aug 2006 | Pages: 49
People who downloaded this item also downloaded
 |
Customer Behavior Modeling In Revenue Management And Auctions: A Review And New Research Opportunities |
|
Linking Customer Behavior to E-Commerce Strategy |
