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New product development has been serving as a growth engine for companies; given this background, the innovation of suppliers that possess new technologies for new products has been a significant subject for manufacturers, particularly in high-tech industries. However, the technology uncertainty associated with the supplier’s development capability may become a considerable obstacle to new product development projects. In this paper, we further develop an analytical model that has been widely applied in the economics literature and examine two representative supply chain contracts, a revenue-sharing contract and a cost-sharing contract, for new product development through upstream innovation under technology uncertainty. We confirm that the supplier’s development capability has a significant impact on contract feasibility. The revenue-sharing contract helps to attain a higher new product quality level and profit for the supply chain. Furthermore, we explore the relationship between a manufacturer and a supplier concerning the performance of the new product development project. Adopting a Nash bargaining model, we analyze the two supply chain contracts under a cooperative relationship in which the manufacturer and supplier cooperatively determine the sharing portion of the revenue or cost. For both contracts, compared with the unilateral relationship, the cooperative relationship leads to a lower manufacturer profit, but a higher new product quality and a higher supply chain profit.

Uis Karo is Indonesian traditional woven cloth that comes from the Karo Region of North Sumatera. The purpose of this research is to determine and analyze the effect of product innovation, product quality and city image on buying decision of Uis Karo at Tourism Object of Berastagi of North Sumatera. Data collection in this research was conducted through a survey approach with quantitative descriptive research type by distributing questionnaires to 95 people. Data collection was done by interviews, questionnaires and documentation studies. The method of data analysis used is multiple linear regression using SPSS software. The results showed that simultaneously product innovation, product quality and the image of the city have positive and significant influence on the buying decision of Uis Karo. Partially each, product innovation, product quality and city image have a positive and significant effect on purchasing decision of Uis Karo.