Two-Wholesale-Price Contracts: Push, Pull, And Advance-Purchase Discount Contracts

Topics:
Negotiations and Contracts
Tags:
Channel Management,
Enterprise Software,
Marketing,
Software,
St. Louis,
Supplier,
Supply Chain,
Supply Chain Management (SCM)
Source:
Washington University in St. Louis

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Overview: The allocation of inventory ownership affects the inventory availability in a supply chain, which in turn determines the supply chain performance. In this paper, the publisher consider a supplier-retailer supply chain in which the supplier starts production well in advance of the selling season, and the retailer is offered two ordering opportunities at different points in time. An early order is allowed before the supplier's production decision, and a late order is allowed after the completion of production and after observing the demand. When the two wholesale prices change, the author illustrate how the inventory decision rights and ownership are shifted and/or shared between the two firms, resulting in push, pull, or advance-purchase discount contracts.

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Format: PDF | Size: 600KB | Date: Dec 2006 | Pages: 35

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