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Article: Three revenue-sharing variants: their significant performance differences under system-parameter uncertainties

TitleThree revenue-sharing variants: their significant performance differences under system-parameter uncertainties
Authors
KeywordsGross profit
Retail price
Revenue-sharing
Simple modifications
Stackelberg games
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. 1752-1764 How to Cite?
AbstractIn the widely studied revenue sharing (hereafter RS) contract format, the manufacturer of a product not only charges the retailer a unit wholesale price w, but also requires the retailer to share part of the product's revenue (ie, the unit retail price p) with him. For a product with price-dependent demand, it is well known that if a dominant manufacturer knows the system parameters deterministically, then RS gives him the perfect power of simultaneously coordinating the channel and allocating profit arbitrarily. Unfortunately, RS's power deteriorates as the manufacturer's knowledge of the system parameters becomes increasingly uncertain. This paper shows that this deterioration can be substantially reduced by using slightly modified versions of RS; these modifications roughly amount to sharing a retailer's gross profit instead of revenue. In other words, this paper presents simple modifications to the classical RS, leading to contract formats that perform substantially better under system-parameter uncertainty. © 2012 Operational Research Society Ltd. All rights reserved.
Persistent Identifierhttp://hdl.handle.net/10722/166799
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.authorHua, ZSen_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. 1752-1764en_US
dc.identifier.issn0160-5682en_US
dc.identifier.urihttp://hdl.handle.net/10722/166799-
dc.description.abstractIn the widely studied revenue sharing (hereafter RS) contract format, the manufacturer of a product not only charges the retailer a unit wholesale price w, but also requires the retailer to share part of the product's revenue (ie, the unit retail price p) with him. For a product with price-dependent demand, it is well known that if a dominant manufacturer knows the system parameters deterministically, then RS gives him the perfect power of simultaneously coordinating the channel and allocating profit arbitrarily. Unfortunately, RS's power deteriorates as the manufacturer's knowledge of the system parameters becomes increasingly uncertain. This paper shows that this deterioration can be substantially reduced by using slightly modified versions of RS; these modifications roughly amount to sharing a retailer's gross profit instead of revenue. In other words, this paper presents simple modifications to the classical RS, leading to contract formats that perform substantially better under system-parameter uncertainty. © 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.subjectGross profit-
dc.subjectRetail price-
dc.subjectRevenue-sharing-
dc.subjectSimple modifications-
dc.subjectStackelberg games-
dc.titleThree revenue-sharing variants: their significant performance differences under system-parameter uncertaintiesen_US
dc.typeArticleen_US
dc.identifier.openurlhttp://library.hku.hk:4550/resserv?sid=HKU:IR&issn=0160-5682&volume=&spage=&epage=&date=2012&atitle=Three+Revenue-Sharing+Variants:+Their+Significant+Performance+Differences+under+System-Parameter+Uncertaintiesen_US
dc.identifier.emailLau, HS: mshslau@hku.hken_US
dc.description.naturelink_to_subscribed_fulltext-
dc.identifier.doi10.1057/jors.2011.131-
dc.identifier.scopuseid_2-s2.0-84868550558-
dc.identifier.hkuros210005en_US
dc.identifier.volume63-
dc.identifier.issue12-
dc.identifier.spage1752-
dc.identifier.epage1764-
dc.identifier.isiWOS:000310791800009-
dc.publisher.placeUnited Kingdom-

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