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A retail store purchases a specific model of Samsung cell phones from Samsung. A unit of these phones, on average, costs $800 dollars to manufacturer.
A retail store purchases a specific model of Samsung cell phones from Samsung. A unit of these phones, on average, costs $800 dollars to manufacturer. It is known that the annual demand curve for these cell phones is 8,0004p, where p is the price the store charges. Currently, the supply chain is uncoordinated: First, manufacturer determines its selling price to the store and then the store determines its selling price to the consumers. a) What are the optimal prices the store and the manufacture charge if they sequentially maximize their profits? b) What would be the total annual demand and the profits each of them make? c) The manufacturer realizes that it could improve the supply chain profits by centralizing the supply chain. If it were centralized, what would be the total demand? What would be the total profit the supply chain makes and what would be the selling price? d) Devise a quantity discount scheme the manufacturer can use to achieve coordination
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