In this paper, we examine the nature of optimal inventory policies in a system where a retailer manages substitutable products. We first consider a system with two products 1 and 2 whose total demand is D and individual demands are negatively correlated. A fixed proportion of the unsatisfied...

An increasing number of manufacturers have started to pursue a strategy that promotes inventory sharing among the dealers in their distribution network. In this paper we analyze a decentralized dealer network in which each independent dealer is given the flexibility to share his inventory. We...

We develop a model of consumer learning and choice behavior in response to uncertain service in the marketplace. Learning could be asymmetric, that is, consumers may associate different weights with positive and negative experiences. Under this consumer model, we characterize the steady-state...

Under a revenue-sharing contract, a retailer pays a supplier a wholesale price for each unit purchased, plus a percentage of the revenue the retailer generates. Such contracts have become more prevalent in the videocassette rental industry relative to the more conventional wholesale price...

We study the following question: How does competition influence the inventory holdings of General Motors' dealerships operating in isolated U.S. markets? We wish to disentangle two mechanisms by which local competition influences a dealer's inventory: (1) the entry or exit of a competitor can...

In this paper, we consider a supply-chain model consisting of a single product, one supplier, and multiple retailers. Demand at the retailers is random, but stationary. Each retailer places her orders to the supplier according to the well-known (Q,R) policy. We assume that the supplier has...

We model a situation in which two retailers consider launching an "Advance Booking Discount" (ABD) program. In this program, customers are enticed to precommit their orders at a discount price prior to the regular selling season. However, these precommitted orders are filled during the selling...

In a recent paper, Mishra and Raghunathan (Mishra, B. K., S. Raghunathan. 2004. Retailer- vs. vendor-managed inventory and brand competition. Management Sci. 50(4) 445-457) claimed that retailers prefer vendor-managed inventory (VMI) because it restores competition among manufacturers and...

We consider a single-period assortment planning and inventory management problem for a retailer, using a locational choice model to represent consumer demand. We first determine the optimal variety, product location, and inventory decisions under static substitution, and show that the optimal...

This paper examines three channel policies that are used in declining price environments: Price protection (P) is a mechanism under which the manufacturer pays the retailer a credit applying to the retailer's unsold inventory when the wholesale price drops during the life cycle; midlife returns...