Article ID: | iaor20101729 |
Volume: | 38 |
Issue: | 2 |
Start Page Number: | 97 |
End Page Number: | 103 |
Publication Date: | Mar 2010 |
Journal: | Operations Research Letters |
Authors: | Tong Chunyang |
Keywords: | procurement |
We show for products featuring an exponential demand with Gamma prior, if the demand forecast improves over time and the manufacturer sets the wholesale price, the expected order size increases when the order is placed later. Both the manufacturer and the retailer gain when the order is placed later.