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Revenue-sharing versus wholesale price mechanisms under different channel power structures

Author

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  • Pan, Kewen
  • Lai, K.K.
  • Leung, Stephen C.H.
  • Xiao, Di

Abstract

We consider a supply chain channel with two manufacturers and one retailer. Each manufacturer can choose either a wholesale price contract or a revenue-sharing contract with the retailer. We discuss and compare the results of two different types of contracts under different channel power structures, to check whether it is beneficial for manufacturers to use revenue-sharing contracts under different scenarios. Then we consider a supply chain channel with one manufacturer and two retailers. Each retailer can choose either a wholesale price contract or a revenue-sharing contract with the manufacturer. We analyze the likely outcomes under different scenarios to discover whether it is beneficial to use revenue-sharing contracts.

Suggested Citation

  • Pan, Kewen & Lai, K.K. & Leung, Stephen C.H. & Xiao, Di, 2010. "Revenue-sharing versus wholesale price mechanisms under different channel power structures," European Journal of Operational Research, Elsevier, vol. 203(2), pages 532-538, June.
    • Handle: RePEc:eee:ejores:v:203:y:2010:i:2:p:532-538
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    References listed on IDEAS

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