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Article: Defending and improving the 'slotting fee': how it can benefit all the stakeholders dealing with a newsvendor product with price and effort-dependent demand

TitleDefending and improving the 'slotting fee': how it can benefit all the stakeholders dealing with a newsvendor product with price and effort-dependent demand
Authors
KeywordsContract terms
Newsvendors
Pricing contracts
Production workers
Public image
Issue Date2012
PublisherPalgrave Macmillan Ltd. The Journal's web site is located at http://www.palgrave-journals.com/jors/index.html
Citation
Journal of the Operational Research Society, 2012, v. 63 n. 12, p. 1731-1751 How to Cite?
AbstractSlotting fee (hereafter SF) is an upfront fee a supplier is required to pay a retailer in order to have his product sold on the retailer's shelves. It is becoming increasingly common, but also widely reviled. This paper considers a newsvendor product whose expected demand is dependent on retail price and sales effort. The question we pose is: given that the Stackelberg-dominant retailer has to choose a pricing contract with which she transacts with the supplier, how would the supply-chain stakeholders fare when the retailer implements SF instead of another practical pricing contract? We show that, contradicting its negative public image, SF empowers the dominant retailer to specify contract terms that will benefit all the stakeholder-groups. That is, the supplier's and the retailer's profits are higher, the production workers are asked to produce more, and the consumers pay a lower retail price. We also propose a new composite contract format that incorporates both the SF and buyback features. This composite format empowers the retailer to provide even greater benefits to the supply-chain's stakeholders. © 2012 Operational Research Society Ltd. All rights reserved.
Persistent Identifierhttp://hdl.handle.net/10722/166798
ISSN
2015 Impact Factor: 1.225
2015 SCImago Journal Rankings: 1.026
ISI Accession Number ID

 

DC FieldValueLanguage
dc.contributor.authorWang, YYen_US
dc.contributor.authorLau, HSen_US
dc.contributor.authorWang, JCen_US
dc.date.accessioned2012-09-20T08:48:30Z-
dc.date.available2012-09-20T08:48:30Z-
dc.date.issued2012en_US
dc.identifier.citationJournal of the Operational Research Society, 2012, v. 63 n. 12, p. 1731-1751en_US
dc.identifier.issn0160-5682en_US
dc.identifier.urihttp://hdl.handle.net/10722/166798-
dc.description.abstractSlotting fee (hereafter SF) is an upfront fee a supplier is required to pay a retailer in order to have his product sold on the retailer's shelves. It is becoming increasingly common, but also widely reviled. This paper considers a newsvendor product whose expected demand is dependent on retail price and sales effort. The question we pose is: given that the Stackelberg-dominant retailer has to choose a pricing contract with which she transacts with the supplier, how would the supply-chain stakeholders fare when the retailer implements SF instead of another practical pricing contract? We show that, contradicting its negative public image, SF empowers the dominant retailer to specify contract terms that will benefit all the stakeholder-groups. That is, the supplier's and the retailer's profits are higher, the production workers are asked to produce more, and the consumers pay a lower retail price. We also propose a new composite contract format that incorporates both the SF and buyback features. This composite format empowers the retailer to provide even greater benefits to the supply-chain's stakeholders. © 2012 Operational Research Society Ltd. All rights reserved.-
dc.languageengen_US
dc.publisherPalgrave Macmillan Ltd. The Journal's web site is located at http://www.palgrave-journals.com/jors/index.htmlen_US
dc.relation.ispartofJournal of the Operational Research Societyen_US
dc.rightsJournal of the Operational Research Society. Copyright © Palgrave Macmillan Ltd.en_US
dc.subjectContract terms-
dc.subjectNewsvendors-
dc.subjectPricing contracts-
dc.subjectProduction workers-
dc.subjectPublic image-
dc.titleDefending and improving the 'slotting fee': how it can benefit all the stakeholders dealing with a newsvendor product with price and effort-dependent demanden_US
dc.typeArticleen_US
dc.identifier.openurlhttp://library.hku.hk:4550/resserv?sid=HKU:IR&issn=0160-5682&volume=&spage=&epage=&date=2012&atitle=Defending+and+Improving+the+%27Slotting+Fee%27:+How+It+Can+Benefit+All+the+Stakeholders+of+a+Supply+Chainen_US
dc.identifier.emailLau, HS: mshslau@hku.hken_US
dc.description.naturelink_to_subscribed_fulltext-
dc.identifier.doi10.1057/jors.2011.111-
dc.identifier.scopuseid_2-s2.0-84868522875-
dc.identifier.hkuros209973en_US
dc.identifier.volume63-
dc.identifier.issue12-
dc.identifier.spage1731-
dc.identifier.epage1751-
dc.identifier.isiWOS:000310791800008-
dc.publisher.placeUnited Kingdom-

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