Question
A retailer's critical ratio is 0.3. To mitigate an incentive conflict surrounding order quantity, the supplier offers the retailer a revenue-sharing contract. Assuming the retailer
A retailer's critical ratio is 0.3. To mitigate an incentive conflict surrounding order quantity, the supplier offers the retailer a revenue-sharing contract. Assuming the retailer behaves rationally, what will the effect be? The retailers critical ratio will decrease because the retailer is incentivized to order more. a) The retailer's critical ratio will increase because the retailer is incentivized to order more b) The retailer's critical ratio will increase because the retailer is incentivized to order less c) More information is reguired to answer the question d) The retailer's critical ratio will decrease because the retailer is incentivized to order less.
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