We analyze channel selection and price setting of a manufacturer who has several distribution options which include selling through (1) a direct channel, (2) a manufacturer-owned retail channel, and/or (3) an independent retail channel. The manufacturer can use any combination of these options....

An important characteristic of high-tech industries is decreasing component prices over time. In the personal computer industry, some component prices decline at a rate of 1% per week. This paper develops an inventory model for products experiencing continuous decrease in unit price. We develop...