 Coordination and incentives in a supplier-retailer rental information goods supply chainMoutaz Khouja, Hari K. Rajagopalan and Elizabeth Sharer International Journal of Production Economics, 2010, vol. 123, issue 2, 279-289 Abstract: In rental information goods supply chain, such as movie DVDs and computers games, the retailer decides on the quantity of DVDs to purchase from the supplier, the rental fee, and the maximum rental duration. These decisions are directly affected by the price the supplier charges the retailers for the DVDs. In this paper we show that revenue sharing as compared to an independent strategy can result in lower rental fee, larger order quantities and increased profit for both the retailer and supplier. We also show that vertical integration (partnership) can result in higher profits across the supply chain compared to revenue sharing or an independent strategy. We also formulate a model to examine the use of incentives for early return of rented DVDs and show that they can increase profit by increasing circulations of DVDs. We also perform numerical sensitive analysis to examine the impact of rental lifecycle and shortage cost on rental fee, order quantity, and profits. Keywords: Supply; chain; Revenue; sharing; Rental; fee (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:proeco:v:123:y:2010:i:2:p:279-289 Access Statistics for this article International Journal of Production Economics is currently edited by Stefan Minner More articles in International Journal of Production Economics from Elsevier |
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