2008
DOI: 10.1287/mnsc.1080.0894
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Strategic Inventories in Vertical Contracts

Abstract: Classical reasons for carrying inventory include fixed (nonlinear) production or procurement costs, lead times, nonstationary or uncertain supply/demand, and capacity constraints. The last decade has seen active research in supply chain coordination focusing on the role of incentive contracts to achieve first-best levels of inventory. An extensive literature in industrial organization that studies incentives for vertical controls largely ignores the effect of inventories. Does the ability to carry inventory in… Show more

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Cited by 145 publications
(214 citation statements)
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“…Examples include Anand et al (2008) and Erhun et al (2011) and the references therein. These papers study supply chain contracts where the treatment mainly focuses on linear inverse demand curves.…”
Section: Literature Reviewmentioning
confidence: 99%
“…Examples include Anand et al (2008) and Erhun et al (2011) and the references therein. These papers study supply chain contracts where the treatment mainly focuses on linear inverse demand curves.…”
Section: Literature Reviewmentioning
confidence: 99%
“…Within each competition mode, we consider two standard vertical contracts, wholesale-price and two-part tariff contracts, both common in practice (Cachon, 2003;Anand et al, 2008). Wholesale-price contracts are popular mainly due to simplicity, but result in low efficiency in supply chains.…”
Section: Introductionmentioning
confidence: 99%
“…The difference between the quantity produced and the sales in each period determines the producer's inventories available for sale in the following period. In line with the relevant literature (e.g., Anand et al 2008;Arvan 1985;Arya et al 2015;Arya and Mittendorf 2013;Mitraille and Moreaux 2013;Mollgaard et al 2000;Krishnan and Winter 2010;Ware 1985), production and inventory decisions are observable and can therefore affect the buyer stockpiling behavior. As discussed in the 10 This cost formulation isolates the strategic inventory incentives under investigation and neutralizes further possible inventory reasons.…”
Section: Timing and Equilibrium Conceptmentioning
confidence: 61%
“…Anand et al (2008) show that in a dynamic buyer-seller relationship the buyer uses strategic inventories to induce the seller to decrease its future price.…”
Section: Introductionmentioning
confidence: 99%
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