We consider a multi-supplier, single-manufacturer supply chain where each supplier sells a different component at varying quality levels. The manufacturer has to decide on which quality level to choose for each component, trading-off the total cost and total quality. Each supplier decides on a...

We study the informational role stock-outs may play when consumers have heterogeneous information about the quality of a firm's product. Typically, in a newsvendor world, matching uncertain demand with inventory leads inevitably to stock-outs. When, in addition, consumers are heterogeneously...