File Download

There are no files associated with this item.

  Links for fulltext
     (May Require Subscription)
Supplementary

Article: The effects of reducing demand uncertainty in a manufacturer-retailer channel for single-period products

TitleThe effects of reducing demand uncertainty in a manufacturer-retailer channel for single-period products
Authors
KeywordsSupply Chain
Two-Echelon Newsboy Problem
Issue Date2002
PublisherPergamon. The Journal's web site is located at http://www.elsevier.com/locate/cor
Citation
Computers And Operations Research, 2002, v. 29 n. 11, p. 1583-1602 How to Cite?
AbstractThe retail-market demand for a newsboy-type product is uncertain. The product's manufacturer sets: (i) a wholesale price "w/unit" for selling the product to the retailer, and (ii) the refund amount "r/unit" (if any) for unsold units returned by the retailer. Given w and r, the retailer determines: (i) the quantity Q that he orders from the manufacturer, and (ii) the retailer price "p/unit" at which he sells to the consumers. Keeping in mind the retailer's freedom to set Q and p in the retailer's own interest, the manufacturer needs to determine how to set w and r that are optimal for the manufacturer. For this market structure, this paper studies how the level of retail-market demand uncertainty will affect the decisions (w, r, Q, p), the expected manufacturer's profit and the expected retailer's profit. Many of the effects turn out to be counter-intuitive with interesting explanations. This paper extends a problem considered (in different variations) in several recent papers in major IE/MS/OR, marketing and economics journals. Somewhat counter-intuitive (and contradictory) results are presented here. Single-period of "newsboy-type" products have been the subject of many recent studies. Practically all these studies assume that there is only one decision-maker; i.e., the vertically integrated "manufacturer-cum-retailer". As an entirely separate issue, the interactions between a manufacturer and a retailer in a "market channel" have also been widely studied, but mostly in the context of amulti-period product. Both characteristics ("single-period product" and "market channel") were included in Iyer and Bergen's (Management Science [4]) investigation of a manufacturer-retailer channel for fashion goods. Iyer and Bergen considered the effects of demand-uncertainty reduction; they made the following assumptions: I. the manufacturer cannot change the wholesale price; II. the manufacturer does not accept returns from the retailer; and III. the retail price is fixed. With Iyer and Bergen's assumptions I-III relaxed, Emmons and Gilbert (Management Science [8]) considered manufacturer-retailer interactions for newsboy products. However, their results do not relate to how demand-uncertainty reduction would affect the manufacturer-retailer interactions (i.e., Iyer and Bergen's question). Our paper shows that when one or more of Iyer and Bergen's three assumptions are relaxed, the effects of demand-uncertainty reduction are significantly different from those depicted in Iyer and Bergen's paper. © 2002 Elsevier Science Ltd. All rights reserved.
Persistent Identifierhttp://hdl.handle.net/10722/177900
ISSN
2015 Impact Factor: 1.988
2015 SCImago Journal Rankings: 2.237
References

 

DC FieldValueLanguage
dc.contributor.authorHing Ling Lau, Aen_US
dc.contributor.authorLau, HSen_US
dc.date.accessioned2012-12-19T09:40:45Z-
dc.date.available2012-12-19T09:40:45Z-
dc.date.issued2002en_US
dc.identifier.citationComputers And Operations Research, 2002, v. 29 n. 11, p. 1583-1602en_US
dc.identifier.issn0305-0548en_US
dc.identifier.urihttp://hdl.handle.net/10722/177900-
dc.description.abstractThe retail-market demand for a newsboy-type product is uncertain. The product's manufacturer sets: (i) a wholesale price "w/unit" for selling the product to the retailer, and (ii) the refund amount "r/unit" (if any) for unsold units returned by the retailer. Given w and r, the retailer determines: (i) the quantity Q that he orders from the manufacturer, and (ii) the retailer price "p/unit" at which he sells to the consumers. Keeping in mind the retailer's freedom to set Q and p in the retailer's own interest, the manufacturer needs to determine how to set w and r that are optimal for the manufacturer. For this market structure, this paper studies how the level of retail-market demand uncertainty will affect the decisions (w, r, Q, p), the expected manufacturer's profit and the expected retailer's profit. Many of the effects turn out to be counter-intuitive with interesting explanations. This paper extends a problem considered (in different variations) in several recent papers in major IE/MS/OR, marketing and economics journals. Somewhat counter-intuitive (and contradictory) results are presented here. Single-period of "newsboy-type" products have been the subject of many recent studies. Practically all these studies assume that there is only one decision-maker; i.e., the vertically integrated "manufacturer-cum-retailer". As an entirely separate issue, the interactions between a manufacturer and a retailer in a "market channel" have also been widely studied, but mostly in the context of amulti-period product. Both characteristics ("single-period product" and "market channel") were included in Iyer and Bergen's (Management Science [4]) investigation of a manufacturer-retailer channel for fashion goods. Iyer and Bergen considered the effects of demand-uncertainty reduction; they made the following assumptions: I. the manufacturer cannot change the wholesale price; II. the manufacturer does not accept returns from the retailer; and III. the retail price is fixed. With Iyer and Bergen's assumptions I-III relaxed, Emmons and Gilbert (Management Science [8]) considered manufacturer-retailer interactions for newsboy products. However, their results do not relate to how demand-uncertainty reduction would affect the manufacturer-retailer interactions (i.e., Iyer and Bergen's question). Our paper shows that when one or more of Iyer and Bergen's three assumptions are relaxed, the effects of demand-uncertainty reduction are significantly different from those depicted in Iyer and Bergen's paper. © 2002 Elsevier Science Ltd. All rights reserved.en_US
dc.languageengen_US
dc.publisherPergamon. The Journal's web site is located at http://www.elsevier.com/locate/coren_US
dc.relation.ispartofComputers and Operations Researchen_US
dc.subjectSupply Chainen_US
dc.subjectTwo-Echelon Newsboy Problemen_US
dc.titleThe effects of reducing demand uncertainty in a manufacturer-retailer channel for single-period productsen_US
dc.typeArticleen_US
dc.identifier.emailHing Ling Lau, A: ahlau@business.hku.hken_US
dc.identifier.authorityHing Ling Lau, A=rp01072en_US
dc.description.naturelink_to_subscribed_fulltexten_US
dc.identifier.doi10.1016/S0305-0548(01)00047-8en_US
dc.identifier.scopuseid_2-s2.0-0036722296en_US
dc.relation.referenceshttp://www.scopus.com/mlt/select.url?eid=2-s2.0-0036722296&selection=ref&src=s&origin=recordpageen_US
dc.identifier.volume29en_US
dc.identifier.issue11en_US
dc.identifier.spage1583en_US
dc.identifier.epage1602en_US
dc.publisher.placeUnited Kingdomen_US
dc.identifier.scopusauthoridHing Ling Lau, A=7202626080en_US
dc.identifier.scopusauthoridLau, HS=7201497264en_US

Export via OAI-PMH Interface in XML Formats


OR


Export to Other Non-XML Formats