Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/147252
Authors: 
Qu, Zhan
Raff, Horst
Schmitt, Nicolas
Year of Publication: 
2016
Series/Report no.: 
CEPIE Working Paper 09/16
Abstract: 
The paper shows that taking inventory control out of the hands of retailers and assigning it to an intermediary increases the value of a supply chain when demand volatility is high. This is because an intermediary can help solve two incentive problems associated with retailers' inventory control and thereby improve the intertemporal allocation of inventory. Adding an intermediary as a new link in a supply chain is also shown to reduce total inventory, to make shipments from the manufacturer less frequent and more variable in size, as well as to reduce social welfare.
Subjects: 
Intermediation
Inventory
Demand Volatility
Supply Chain
JEL: 
L11
L12
L22
L81
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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