Article ID: | iaor19921273 |
Country: | United States |
Volume: | 37 |
Issue: | 11 |
Start Page Number: | 1377 |
End Page Number: | 1389 |
Publication Date: | Nov 1991 |
Journal: | Management Science |
Authors: | Jaikumar Ramchandran, Rangan V. Kasturi |
Keywords: | distribution |
Designing distribution systems requires two decisions, one strategic (i.e., the number of levels between the producer and the customer) and the other tactical (i.e., channel management policies such as trade discounts and rebates). While the modeling literature focuses on one or the other, evidence from the field indicates that the two decisions are in fact interactive. This paper develops and then applies an integrated model that solves the strategic issue of channel levels and the tactical issue of price rebates simultaneously.