In this study, we consider the mechanism or the contract to mitigate inefficiency of individual and partial optimization in decentralized supply chain, which consist of a manufacturer and a retailer and in which the latter can increase demands by prac...
In this study, we consider the mechanism or the contract to mitigate inefficiency of individual and partial optimization in decentralized supply chain, which consist of a manufacturer and a retailer and in which the latter can increase demands by practicing her own promotional efforts. In that supply chain, we show to be able to achieve profit level in centralized channel by manufacturer’s ‘allowance’ to retailer.