Question
Supply Contracts: Q.6 These are the cost and contract parameters: Item Price Retailer sells for: $125.00 Manufacturer sells for: $80.00 Salvage: $20.00 Manufacturer buy back:
Supply Contracts:
Q.6
| These are the cost and contract parameters: | |
| Item | Price |
| Retailer sells for: | $125.00 |
| Manufacturer sells for: | $80.00 |
| Salvage: | $20.00 |
| Manufacturer buy back: | $55.00 |
| Fixed Production Cost: | $100,000.00 |
| Variable Production Cost: | $35.00 |
a. If a buy-back contract is used and the manufacturer sells the product to the distributor for $65, what is the buy-back amount that is required for the supply chain profit to equal the globally optimal profit?
b. If a revenue-sharing contract is used, what is an appropriate price for the manufacturer to charge the distributor, and what is an appropriate revenue-sharing level, so that the supply chain profit equals the globally optimal profit?
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Management And Organisational Behaviour
Authors: Laurie Mullins
7th Edition
9780273688761
