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Factory Gate Pricing : An Analysis of the Dutch Retail Distribution

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  • Le Blanc, H.M.

    (Tilburg University, Center For Economic Research)

  • Cruijssen, F.

    (Tilburg University, Center For Economic Research)

  • Fleuren, H.A.

    (Tilburg University, Center For Economic Research)

  • de Koster, M.B.M.

Abstract

Factory Gate Pricing (FGP) is a relatively new phenomenon in retail distribution. Under FGP, products are no longer delivered at the retailer distribution center, but collected by the retailer at the factory gates of the suppliers. Owing to both the asymmetry in the distribution networks (the supplier sites greatly outnumber the retailer distribution centers) and the better inventory and transport coordination mechanisms, this is likely to result in high savings. A mathematical model was used to analyze the benefits of FGP for a case study in the Dutch retail sector. Extensive numerical results are presented to show the effect of the orchestration shift from supplier to retailer, the improved coordination mechanisms, and sector-wide cooperation.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Le Blanc, H.M. & Cruijssen, F. & Fleuren, H.A. & de Koster, M.B.M., 2004. "Factory Gate Pricing : An Analysis of the Dutch Retail Distribution," Discussion Paper 2004-35, Tilburg University, Center for Economic Research.
    • Handle: RePEc:tiu:tiucen:4357d6e6-7a74-4bd6-b5a9-d41c3895a0d4
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    Cited by:

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    2. DEFRYN, Christof & VANOVERMEIRE, Christine & SÖRENSEN, Kenneth & VAN BREEDAM, Alex & VANNIEUWENHUYSE, Bart & VERSTREPEN, Sven, 2014. "Gain sharing in horizontal logistic collaboration. A case study in the fresh fruit and vegetables sector," Working Papers 2014004, University of Antwerp, Faculty of Business and Economics.
    3. Rodríguez-Martín, Inmaculada & Salazar-González, Juan-José & Yaman, Hande, 2019. "The periodic vehicle routing problem with driver consistency," European Journal of Operational Research, Elsevier, vol. 273(2), pages 575-584.
    4. VANOVERMEIRE, Christine & CUERVO, Daniel Palhazi & SÖRENSEN, Kenneth, 2013. "Estimating collaborative profits under varying partner characteristics and strategies," Working Papers 2013031, University of Antwerp, Faculty of Business and Economics.
    5. Defryn, Christof & Sörensen, Kenneth & Cornelissens, Trijntje, 2016. "The selective vehicle routing problem in a collaborative environment," European Journal of Operational Research, Elsevier, vol. 250(2), pages 400-411.
    6. DEFRYN, Christof & SÖRENSEN, Kenneth & CORNELISSENS, Trijntje, 2015. "The selective vehicle routing problem in a collaborative environment," Working Papers 2015006, University of Antwerp, Faculty of Business and Economics.
    7. Lindawati & Johan van Schagen & Mark Goh & Robert de Souza, 2014. "Collaboration in urban logistics: motivations and barriers," International Journal of Urban Sciences, Taylor & Francis Journals, vol. 18(2), pages 278-290, July.
    8. Cruijssen, F., 2006. "Horizontal cooperation in transport and logistics," Other publications TiSEM ab6dbe68-aebc-4b03-8eea-d, Tilburg University, School of Economics and Management.
    9. Harris, Irina & Naim, Mohamed & Palmer, Andrew & Potter, Andrew & Mumford, Christine, 2011. "Assessing the impact of cost optimization based on infrastructure modelling on CO2 emissions," International Journal of Production Economics, Elsevier, vol. 131(1), pages 313-321, May.
    10. Rodríguez-Martín, Inmaculada & Yaman, Hande, 2022. "Periodic Vehicle Routing Problem with Driver Consistency and service time optimization," Transportation Research Part B: Methodological, Elsevier, vol. 166(C), pages 468-484.
    11. Audy, Jean-François & D’Amours, Sophie & Rönnqvist, Mikael, 2012. "An empirical study on coalition formation and cost/savings allocation," International Journal of Production Economics, Elsevier, vol. 136(1), pages 13-27.
    12. Cruijssen, Frans & Borm, Peter & Fleuren, Hein & Hamers, Herbert, 2010. "Supplier-initiated outsourcing: A methodology to exploit synergy in transportation," European Journal of Operational Research, Elsevier, vol. 207(2), pages 763-774, December.
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    More about this item

    Keywords

    pricing; retailing; distribution; supply chain management; Netherlands;
    All these keywords.

    JEL classification:

    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • M - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics
    • M11 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Production Management
    • R4 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics

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