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1、MANAGEMENTSCIENCEinforms®Vol.50,No.1,January2004,pp.34–47doi10.1287/mnsc.1030.0168issn0025-1909eissn1526-55010450010034©2004INFORMSChannelPerformanceUnderConsignmentContractwithRevenueSharingYunzengWangWeatherheadSchoolofManagement,CaseWesternReser
2、veUniversity,Cleveland,Ohio44120,yunzeng.wang@case.eduLiJiangUniversityofMichiganBusinessSchool,AnnArbor,Michigan48109,ljiang@bus.umich.eduZuo-JunShenDepartmentofIndustrialandSystemsEngineering,UniversityofFlorida,Gainesville,Florida32611,shen@ise.ufl.e
3、duUnderaconsignmentcontractwithrevenuesharing,asupplierdecidesontheretailpriceanddeliveryquantityforhisproduct,andretainsownershipofthegoods;foreachitemsold,theretailerdeductsapercentagefromthesellingpriceandremitsthebalancetothesupplier.Inthispaperwes
4、howthat,undersuchacontract,boththeoverallchannelperformanceandtheperformanceofindividualfirmsdependcriticallyondemandpriceelasticityandontheretailer’sshareofchannelcost.Inparticular,the(expected)channelprofitloss,comparedwiththatofacentralizedsystem,incr
5、easeswithdemandpriceelasticityanddecreaseswithretailer’scostshare,whiletheprofitshareextractedbytheretailerdecreaseswithpriceelasticityandincreaseswithretailer’scostshare.Withaniso-price-elasticdemandmodel,weshowthatthechannelprofitlosscannotexceed26.4%,
6、andthattheretailer’sprofitsharecannotbebelow50%.Whenpriceelasticityislow,orwhentheretailer’scostshareapproaches100%,orboth,theretailercanextractnearlyallthechannelprofitthatisalmostequaltothecentralizedchannelprofit.Keywords:consignmentsales;revenuesharin
7、g;supplychainmanagementHistory:AcceptedbyChrisTang,formerdepartmenteditor;receivedDecember20,2001.Thispaperwaswiththeauthors2monthsfor2revisions.1.IntroductionConsignmentwithrevenuesharingasabusinessAmazon.comhasanonline“marketplace”whereany-arrangemen
8、tiswelldocumentedinbusinesstext-onecanlistforsalenew,used,orrefurbisheditemsbooks:(books,CDs,electronics,toolsandhardware,kitchenUndersuchanarrangement,ownershipofthegoodsandhousewares,etc.).Withafewminorrestrictions,isretainedbythesupp