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Supply Chain Management

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4. Use the spreadsheet provided in the textbook's CD-ROM to answer the following questions on supply chain coordination. We say a supply chain is coordinated if it achieves the global optimal solutiong.

a) For the buy-back contract, the retail DC selects the ordering quantity depending on the buy-back price. Set the manufacturer's selling price to (cellB9) $80. Plot the retail DC's expected profit, manufacturer's profit, and the total supply chain profit as a function of the buy-back price (cell B11). Find, if it exists, a buy-back price that would coordinate this supply chain, and compare profits of the manufacturer and the distributor. If it does not exist, briefly explain.

b) Set the manufacturer's selling price to $70, and repeat the question.

c) For the revenue-sharing contract, the retail DC selects the ordering quantity depending on the whole-sale price and revenue-sharing percentage. Find, if exists, a pair of a whole-sale price (cell B9) and revenue-sharing percentage (cell B11)that would coordinate this supply chain. Can you find another pair?

Please see attachment for spreadsheet.

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