Cooperation and profit allocation in distribution chains
Decision Support Systems
Computers and Operations Research
Effects of Information Disclosure Under First-and Second-Price Auctions in a Supply Chain Setting
Manufacturing & Service Operations Management
Incentives for Retailer Forecasting: Rebates vs. Returns
Management Science
Research on buy-back contract with sales effort cost sharing
CCDC'09 Proceedings of the 21st annual international conference on Chinese control and decision conference
The research on the coordination methods of reverse supply chain
CCDC'09 Proceedings of the 21st annual international conference on Chinese control and decision conference
Research on credit period contract under the uncertain cost information of retailer
CCDC'09 Proceedings of the 21st annual international conference on Chinese control and decision conference
Effect of Supply Reliability in a Retail Setting with Joint Marketing and Inventory Decisions
Manufacturing & Service Operations Management
Quick Response and Retailer Effort
Management Science
Analysis on the effects of stock sharing on supply chain
Computers and Industrial Engineering
A hybrid solution to collaborative decision-making in a decentralized supply-chain
Journal of Engineering and Technology Management
Effects of promotion cost sharing policy with the sales learning curve on supply chain coordination
Computers and Operations Research
Referral service of infomediary in B2C supply chain
International Journal of Networking and Virtual Organisations
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In this paper, a risk-neutral manufacturer sells a single product to a risk-neutral retailer. The retailer chooses inventories ex ante and promotional effort ex post. If the wholesale price exceeds marginal production cost, the retailer orders fewer than the joint profit-maximizing inventories. If the manufacturer attempts to coordinate inventories by buying back unsold units, then the retailer's promotional incentives are dulled. Under very general assumptions on the form of the effort function, we show that buy-backs adversely affect supply chain profits, and higher buy-back prices imply lower profits. Also, while a buy-back alone cannot coordinate the channel, coupling buy-backs with promotional cost-sharing agreements (if effort cost is observable), offering unilateral markdown allowances ex post (if demand is observable but not verifiable), or placing additional constraints on the buy-back (if demand is observable and verifiable) does result in coordination. This problem is not limited to returns policies but is shown to hold for a much larger set of contracts. The results are quite robust (e.g., when the retailer chooses effort before observing demand), but coordinating contracts become more problematic if, for example, the retailer also stocks substitutes for the manufacturer's product. Other model extensions are also discussed.