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This study examines the problem of optimally dynamic joint decisions, including replenishment scheduling/ quantity, retail price, wholesale price, and revenue-sharing allocation, in a vertically decentralised singlemanufacturer Stackelberg and single-retailer channel over a multi-period planning horizon, subject to deteriorating goods and multivariate demand function. This study uses a calculus-based formulation combined with dynamic programming techniques to solve the channel coordination decision problem. Additionally, three arrangements, namely price-only contract, revenue-sharing contract, and revenue-sharing plus linear rebate and side-payment contract for channel coordination, are developed under retailer-managed inventory (RMI) and vendor-managed inventory (VMI) systems, respectively. The analysis reveals that the proposed policy under the VMI system with the revenue-sharing plus linear rebate and side-payment contract tends to obtain low retail prices and large demand quantity, and results in near-perfect coordination, including greater system efficiency and Pareto improvements, for the vertically decentralised dynamic channel.

Purpose – This study aims to explore the effects of subsidiary–local supplier linkage characteristics in a supply chain and the moderating effects of a multinational corporation’s (MNC’s) international experience (IE) and a subsidiary’s innovation orientation (IO) on the subsidiary’s technological capability. Design/methodology/approach – A new research framework is developed comprising four constructs and six research hypotheses. Applying the regression model, the hypotheses were tested on data from Taiwanese MNC’s subsidiaries of manufacturing industries in Asian developing countries. Findings – The subsidiary–local supplier linkage characteristics, including economic aspect: asset-specific investment (ASI) of local supplier and social aspect: relational capital (RC) of local linkage, are positively associated with subsidiary’s technological capability. Moreover, the MNC’s IE can enhance the positive effect of RC on the subsidiary’s technological capability and the subsidiary’s IO decreases the positive impact of ASI on the subsidiary’s technological capability. Practical implications – This study provides useful insights into how MNCs and subsidiaries should concentrate on the factors that increase the subsidiary’s technological capability. Moreover, MNCs’ and subsidiaries’ managers must endeavor to establish long-term linkages with carefully selected local suppliers, induce these suppliers to provide appropriate ASI, and actively develop RC in the subsidiary–local supplier linkage to enhance the subsidiary’s technological capability. Originality/value – This study demonstrates that subsidiary–local supplier linkage characteristics, MNC’s IE and subsidiary’s IO can be applied to examine the technological capability of subsidiaries operating in less advanced countries.

Purpose -This study aims to investigate the influence of transaction cost (TC) factors and the moderating influence of firm capability factors on the extent of domestic outsourcing of a multinational corporation (MNC) subsidiary. Design/methodology/approach -A new research framework is developed comprising four constructs and six research hypotheses, coupled with international experience (IE) and subsidiary scale (SS) as moderating constructs. Applying the regression model, the hypotheses were tested on data from MNC subsidiaries engaged in manufacturing in Taiwan, based on the TC theory, resource-based view, and outsourcing literature. Findings -The TC factors, including environmental dynamism and subsidiary technology level, are negatively related with degree of domestic outsourcing. Moreover, the MNC IE and SS can reduce the TCs, thus increasing the degree of domestic outsourcing by MNC subsidiaries at the high environmental dynamism and subsidiary technology levels.Research limitations/implications -The study data were obtained from MNC subsidiaries operating in Taiwan, and the single country research design is a limitation of this study. Practical implications -This study provides useful insights into how MNCs and subsidiaries should concentrate on the factors that increase the TCs of domestic outsourcing. Moreover, MNCs and subsidiaries must endeavor to cultivate and apply capabilities to mitigate TCs and fully realize the benefits of domestic outsourcing. Originality/value -This study demonstrates that TC factors can also be applied to examine the outsourcing strategies of firms operating in less advanced countries. Additionally, the capability factors of MNCs and subsidiaries can reduce TCs, thus increasing domestic outsourcing by subsidiaries.

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