question archive Which of the followings is True? a) In a buy-back contract, the profits of the channel are equal to the maximum profits of a centralized supply chain that is managed by a single decision maker b) The supplier always benefits from a buyback contract, but it is not clear whether the buyer benefits from a buyback contract c) In a buy-back contract, we have only one pair (w,b) that coordinates the channel d) In a buy-back contract, both supplier and buyer benefit from the contract and increase their profits, but the channel profits may decrease
Which of the followings is True? a) In a buy-back contract, the profits of the channel are equal to the maximum profits of a centralized supply chain that is managed by a single decision maker b) The supplier always benefits from a buyback contract, but it is not clear whether the buyer benefits from a buyback contract c) In a buy-back contract, we have only one pair (w,b) that coordinates the channel d) In a buy-back contract, both supplier and buyer benefit from the contract and increase their profits, but the channel profits may decrease
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Which of the followings is True?
a) In a buy-back contract, the profits of the channel are equal to the maximum profits of a centralized supply chain that is managed by a single decision maker
b) The supplier always benefits from a buyback contract, but it is not clear whether the buyer benefits from a buyback contract
c) In a buy-back contract, we have only one pair (w,b) that coordinates the channel
d) In a buy-back contract, both supplier and buyer benefit from the contract and increase their profits, but the channel profits may decrease
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c. True
Step-by-step explanation
a. is false as there is a spillover of profit on the buyer side ( w - b) and also on the supplier side for disposing the unsold inventory
b. False;The reverse is true, the buyer's risk of unsold inventory gets reduced considerably at the cost of increased supplier risk of buybacks
c. True; The whole sale and the buyback price coordinates the channel in a buyback contract.
d. False, explained in point b
