Strategic Customer Behavior, Commitment, and Supply Chain Performance

@article{Su2008StrategicCB,
  title={Strategic Customer Behavior, Commitment, and Supply Chain Performance},
  author={Xuanming Su and Fuqiang Zhang},
  journal={Management Science},
  year={2008},
  volume={54},
  pages={1759-1773}
}
This paper studies the impact of strategic customer behavior on supply chain performance. We start with a newsvendor seller facing forward-looking customers. The seller initially charges a regular price but may salvage the leftover inventory at a lower salvage price after random demand is realized. Customers anticipate future sales and choose purchase timing to maximize their expected surplus. We characterize the rational expectations equilibrium, where we find that the seller's stocking level… CONTINUE READING

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