Collaborative Promotions: Optimizing Retail Supply Chains with Upstream Information Sharing
Springer Science & Business Media, Aug 19, 2010 - Business & Economics - 153 pages
Promotions are at the same time beloved and feared by both food retailers and branded goods manufacturers in today’s retail environment. Beloved because they attract smart customers and generate an immediate effect on a brand’s sale. Feared because there is uncertainty about the competitors’ behavior and the actual customer demand leading to high forecast errors. For the retailer, this results in a doom loop of over- or understocking with high inventory costs in the supply chain. Collaboration between retailers and the manufacturer disentangles the doom loop. The thesis reveals the appropriate kind and timing of information and develops a so called Competition Index. Inventory in the supply chain is eliminated and the customer is served better at a lower price. Based on a joint inventory and pricing model and an empirical analysis, it shows that the supply chain efficiency gains from collaborative promotions result in a win for customers, retailers and the manufacturer.
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Chapter 3 Literature Review
Chapter 4 Retailer Competition
Chapter 5 Empirical Analysis
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As(p asymmetric retailers b)ph benefits brand bullwhip effect c.pl c(ph c(pl Collaborative Promotions Competition Index competitor competitor’s promotion frequency CPFR critical fractile Cu(ph cumulative distribution function customer demand customer welfare data set decrease diapers EDLP EUR/unit expected profit forecast frequency effect Further German retail Heerde hypermarkets increase information sharing scenario inventory costs inventory effect lower loyal customer segment market share mation sharing Metro Group mixed strategy equilibrium Nash equilibrium newsvendor offers the product optimal order quantity period price levels price promotions pricing strategy private labels profit effect promotion depth promotion frequency fB promotion strategy Proposition purchase pure strategy reduced regular price response of retailer retail chain retail price format Retailer F retailer’s retailers and manufacturers share of loyal smart customer segments stockout stockpiling customer segment stockpiling segment ˇ1t store-switching customer segment supply chain efficiency symmetric tion upstream information sharing value of information