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lect18 - Supply Contracts Yossi Sheffi ESD.260 Logistics...

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Supply Contracts Yossi Sheffi ESD.260 Logistics Systems November 9 th , 2006
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(c) Yossi Sheffi, MIT 2 Outline Supply contracts Wholesale contracts Buyback contracts Revenue sharing contracts Option contracts
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(c) Yossi Sheffi, MIT 3 The Scenario: A contract is negotiated The retailer places order (a single period) The supplier makes and sends the stuff The selling season takes place Accounting (sales, salvage, etc.) Supplier Retailer
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(c) Yossi Sheffi, MIT 4 Consumer Demand Demand Density at Retail Level 0 2 4 6 8 10 12 14 16 400 500 600 700 800 900 1,000 1,100 1,200 1,300 Actual Demand Probability Bin Freq. 400 0 500 2 600 5 700 11 800 15 900 10 1,000 5 1,100 3 1,200 1 1,300 0 Average: 811.54 Std Dev: 154.23
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