Consider a manufacturer and a retailer that currently work with
a wholesale price contract. The wholesale price is $3 per unit and
the retail price is $5 per unit. The production cost is $1 per
unit. The manufacturer now offers a revenue sharing contract such
that the retailer has to pay $1 to the manufacturer for each
product sold at the retail price of $5. Compared to the original
wholesale price contract, the new contract changes (other
parameters remain as before):
A. The overage cost
B. The fixed ordering cost
C. The underage cost
D. The best inventory model to use
E. None of these will be changed
Consider a manufacturer and a retailer that currently work with a wholesale price contract. The wholesale price is $3 pe
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