Paper Info
Title
Optimal Reservation Pricing Strategy For A Fashion Supply Chain With Forecast Update And Asymmetric Cost Information
Abstract
We address the reservation pricing problem for a two-echelon fashion supply chain in which the downstream manufacturer with private information on its operations cost (low or high type) reserves the capacity for a critical component from the upstream supplier before placing the final order. We consider the case when the demand forecast is partially updated. We find that a novel menu of reservation contracts containing the unit reservation fee with reservation quantity and final order could induce the manufacturer to reveal its operations cost information truthfully. We also show that the supplier should require less capacity reservation and charge a lower unit reservation fee if it has asymmetric information about the manufacturer's operations cost. Finally, we analyse the effects of forecast update, and our results indicate that: (i) the supplier benefits from forecast update because the optimal reservation pricing strategy is designed to reveal the true information and meanwhile induce a higher capacity reservation; and (ii) a greater amount of forecast update decreases the supply chain deficit and increases the supplier's agency cost.
Year
DOI
Venue
2018
10.1080/00207543.2014.998789
INTERNATIONAL JOURNAL OF PRODUCTION RESEARCH
Keywords
DocType
Volume
supply chain management, pricing, capacity reservation, revelation mechanism, forecast update, asymmetric information
Journal
56
Issue
ISSN
Citations 
5
0020-7543
12
PageRank 
References 
Authors
0.84
20
4
Name
Order
Citations
PageRank
Danqin Yang1453.18
Tiaojun Xiao229328.31
Tsan-Ming Choi3104075.03
T. C. E. Cheng437849.65