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Author:Gilbert, S.M.
Cvsa, V.
Title:Strategic commitment to price to stimulate downstream innovation in a supply chain
Journal:European Journal of Operational Research
2003 : NOV, VOL. 150:3, p. 617-639
Index terms:Supply chain
Distribution channels
Industrial organization
Cost reduction
R&D
Innovation
Language:eng
Abstract:In this paper the authors examine the trade-off that is faced when a firm's channel partner has opportunities to invest in either cost reduction or quality improvement, i.e. demand enhancement. Should it commit to a price in order to encourage innovation, or shoud it remain flexible in order to respond to demand uncertainty. The paper discusses several simple wholesale pricing mechanisms with respect to this trade off.
SCIMA record nr: 254797
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