Question
We have looked at the math behind the buyback contract and seen how the profit pie can be enlarged with the right supply chain alignment
We have looked at the math behind the buyback contract and seen how the "profit pie" can be enlarged with the right supply chain alignment via the contract agreement. The profit pie can the be split between the partners, depending on the specific parameters (wholesale price, buyback price) in the contract.
However, there are many more contracts that enable supply chain alignment. For example
Quantity discount contracts
Revenue-sharing contracts
Price protection contracts
Quantity flexible contracts
Reservation (or option) contracts for production
Pick one of these contract types, and explain how the contract helps to align the supply chain (this can be in terms of risk-sharing or forecast accuracy, for example).
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