Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/175671
Authors: 
Raff, Horst
Schmitt, Nicolas
Qu, Zhan
Year of Publication: 
2017
Series/Report no.: 
KCG Working Paper 7
Abstract: 
The paper shows that taking inventory control out of the hands of competitive or exclusive retailers and assigning it to a manufacturer increases the value of a supply chain especially for goods whose demand is highly volatile. This is because doing so solves incentive distortions that arise when retailers have to allocate inventory across sales periods, and thus allows for better intertemporal price discrimination. Assigning inventory control to a manufacturer is also shown to have effects on total inventory and social welfare.
Subjects: 
inventory
supply chain
demand uncertainty
storable good
price discrimination
JEL: 
L11
L12
L22
L81
Document Type: 
Working Paper

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