蒋明晃教授RevenueSharingContracts.PPT

* * * * * * * * Determining Optimal Level of Product Availability Optimal Matching of Supply and Demand (III) 【本著作除另有註明外，採取創用CC「姓名標示－非商業性－相同方式分享」台灣3.0版授權釋出】 第十單元(2) ： Determining Optimal Level of Product Availability * 蔣明晃教授 Revenue Sharing Contracts Manufacture charges the retailer a low wholesale price and shares a fraction of the revenue generated by the retailer. The retailer cost will be decreased due to lower overstock cost, thus, retailer will increase the level of product availability resulting higher profits for both manufacturer and retailer. Basher Eyre _Geograph * Revenue Sharing Contracts Manufacturer’s production cost = v Wholesale price charged by manufacturer = c Manufacturer shares a fraction f of the retailer’s revenue Retailer charges a retail price p and has a salvage value sR for unsold items. The understocking cost = Cu = (1-f)p – c The overstocking cost = Co = c – sR * Revenue Sharing Contracts * Revenue Sharing Contracts Example: TF charges only c = $10 for each jacket, SA sells the jacket for p = $200 and shares f of the revenue to TF. Demand at this price is normal distributed with a mean 1000 and a standard deviation 300. Assume that no salvage value for any leftover jackets. * Revenue Sharing Contracts Wholesale Price c Revenue-Sharing Fraction f Optimal Order Size for SA Expected Overstock At SA Expected Profit for SA Expected Profit for TF Expected Supply Chain Profit $10 0.3 1440 449 124273 59429 183702 10 0.5 1384 399 84735 98580 183315 10 0.7 1290 317 45503 136278 181781 10 0.9 1000 120 7606 158457 166063 20 0.3 1320 342 110523 71886 182409 20 0.5 1252 286 71601 109176 180777 20 0.7 1129 195 33455 142051 175506 * Revenue Sharing Contracts Observations: revenue sharing with a lower wholesale price allows both retailers and manufactures to increase their profit. The revenue sharing encourages retailers to increase the level of product availability Applications: video rental industry, such as Blockbuster. * Contracts for Produ