Manufacturer's pricing strategy and return policy for a single-period commodity

Lau, Hon‐Shiang; Lau, Amy Hing‐Ling

doi:10.1016/s0377-2217(98)00123-4

Cited by 226 publications

(113 citation statements)

References 15 publications

Supporting

Mentioning

108

Contrasting

Unclassified

Order By: Relevance

“…In view of this, a number of papers have been devoted to risk analysis of supply chain models. Recent studies include, but are not limited to, those by Lau [13], Bouakiz and Sobel [5], Choi et al [9], Eeckhoudt et al [10], Lau and Lau [14], Agrawal and Seshadri [1,2], Chen and Federgruen [7], Buzacott et al [6], Chen et al [8], Wang and Webster [18], Wu et al [19], Bogataj and Bogataj [4], He and Zhang [11], Sounderpandian, Prasad and Madan [16], and Agrawal and Ganeshan [3]. For an extensive review of the literature on supply chain risk management or extension of different objectives on newsvendor problem, the reader is referred to Khouja [12], Tang [17] and Wu et al [20].…”

Section: Introductionmentioning

confidence: 99%

Mean–variance analysis of the newsvendor model with stockout cost☆

Wang

et al. 2009

Omega

156

View full text Add to dashboard Cite

We apply the mean-variance approach to analyze the risk-averse newsvendor problem with stockout cost. We first derive an explicit form and some new properties of the variance of the profit function. Then, under the assumption that demand follows the power distribution, and its special case the uniform distribution, we obtain the set of optimal ordering quantities. We also give a counterexample to one result presented in the literature. Contrary to the traditional result in the literature that the risk-averse newsvendor always orders less than the risk-neutral newsvendor, our findings show that this may not be the case when stockout cost is considered because the newsvendor may order more than the risk-neutral newsvendor order quantity under a stockout situation with mean-variance tradeoff.

show abstract

Section: Introductionmentioning

confidence: 99%

Mean–variance analysis of the newsvendor model with stockout cost☆

Wang

et al. 2009

Omega

156

View full text Add to dashboard Cite

show abstract

“…This amount of supportive money is commonly called the markdown incentive or markdown money. This policy is quite similar to the returns/buyback policy reported in the literature [6][7][8], but it does not require the physical return of leftover products.…”

Section: Introductionmentioning

confidence: 72%

Enhancing Economic Sustainability by Markdown Money Supply Contracts in the Fashion Industry: China vs U.S.A.

Shen

Choi

2015

Sustainability

View full text Add to dashboard Cite

Supply chain contracts, such as the markdown money policy (MMP), are commonly adopted in the fashion industry. In this paper, we explore how fashion companies can use MMP to enhance economic sustainability from the cross-cultural perspective. We conduct case studies on two fashion firms (suppliers), one from China and one from U.S.A., that are adopting MMP in their respective supply chains. Via semi-structured interviews with staff members and some public data searching of the target companies, we find that the cultural factors, such as power distance and collectivism/individualism, affect contract selection, contract management, supplier-retailer leadership, and supplier-retailer relationship. We use the Hofstede's national cultural dimensions theory to explain our insights. Specifically, in China, a country with a relatively high degree of power distance and collectivism, the companies tend to care more about the group interest and loyalty. The Chinese fashion companies are more willing to play the leading role in managing the relationships with their retailers, and offer MMP to them. In the U.S.A., a country with a relatively low degree of power distance and individualism, the companies are more likely to emphasize their own interest in trading. In fact, we find that American fashion suppliers tend to bargain with their retailers, and they are less willing to proactively provide the markdown money as a sponsor. Finally, managerial implications are provided, and several future challenges on MMP are examined.

show abstract

“…Bose and Anand (2007) coped with the game focusing on one manufacturer and one vendor supply chain with exogenously fixed wholesale price, where the manufacturer maximizes his expected profit subject to participation constraint of the retailer's optimal profit; and with aid of numerical examples, channel coordination of the constrained Nash equilibrium is claimed. Later, Yao et al (2008) conducted a string of examples regarding the game in light of the price-only and the return policy contracts, along with a conclusion that the return policy contract actually improves channel profit; in the case of high demand variability, they further suggested that manufacturer is supposed to split some profit to continue the game, a similar result appeared in Lau and Lau (1999), Lau et al (2000) and Tsay (2001). Besides that, Serin (2007) stressed on two-vendor problem with initial and reallocated demand considerations, core value of which is that, under certain condition on profit function, problems of two-player type (Nash game) and leader-follower type (Stackelberg game) share common optimal solutions in inventory management.…”

Section: Introductionmentioning

confidence: 94%