We study the optimal distribution strategy of a supplier with limited capacity. The supplier may adopt the supplier only role, be the solo seller in the market, or use the dual channel strategy and compete with its downstream buyer. In comparison to the case of unlimited capacity, we show that...

As business-to-business commerce shifts to the Internet, newer suppliers with cheaper but unreliable technologies enter the market place to win orders from firms by beating the price of their perfectly reliable (but expensive) competitors. The dilemma facing purchasing firms is the allocation of...