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In this article, the author provides a simple characterization of retailer response to manufacturer trade deals in terms of the consumer demand conditions that the retailer faces. Specifically, the author shows conditions on the curvature of consumer demand functions that make it optimal for a profit-maximizing retailer to pass through greater (less) than 100% of the trade deal amount it gets from a manufacturer. Using these conditions, the author demonstrates that whereas the linear and all concave consumer demand functions lead to less than 100% optimal retail passthrough, there exists a subset of convex consumer demand functions for which a retailer rationally engages in greater than 100% pass-through. This subset contains many commonly used demand functions, such as the constant elasticity demand function, the negative exponential demand function, and many other varying elasticity demand functions. [ABSTRACT FROM AUTHOR]

A two-echelon supply chain problem influenced by retail price and sales effort is investigated in this paper, in which the demand, manufacturing cost and sales effort elasticity are considered as uncertain variables. Centralized decision model and decentralized decision model based on information about retailer’s scale parameter are presented, and the optimal solutions are obtained by game theory. In addition, two coordination models under symmetric and asymmetric information situations are developed. Furthermore, the parameters are treated as fuzzy variables and the results prove that fuzzy theory can be used to construct efficient models as well. Numerical examples indicate that the profit of the entire supply chain in two coordination situations are greater than that in the without coordination situation. What’s more, the consumers have to face a higher retail price when under symmetric information situation. [ABSTRACT FROM AUTHOR]

We empirically investigate the firm growth model proposed by Buldyrev et al. by using a unique dataset that contains the daily sales of more than 200 thousand products, which are collected from about 200 supermarkets in Japan over the last 20 years. We find that the empirical firm growth distribution is characterized by a Laplace distribution at the center and power-law at the tails, as predicted by the model. However, some of these characteristics disappear once we randomly reshuffle products across firms, implying that the shape of the empirical distribution is not produced as described by the model. Our simulation results suggest that the shape of the empirical distribution stems mainly from the presence of relationship between the size of a product and its growth rate. [ABSTRACT FROM AUTHOR]

We empirically investigate fluctuations in product prices in online markets by using a tick-by-tick price data collected from a Japanese price comparison site, and find some similarities and differences between product and asset prices. The average price of a product across e-retailers behaves almost like a random walk, although the probability of price increase/decrease is higher conditional on the multiple events of price increase/decrease. This is quite similar to the property reported by previous studies about asset prices. However, we fail to find a long memory property in the volatility of product price changes. Also, we find that the price change distribution for product prices is close to an exponential distribution, rather than a power law distribution. These two findings are in a sharp contrast with the previous results regarding asset prices. We propose an interpretation that these differences may stem from the absence of speculative activities in product markets; namely, e-retailers seldom repeat buy and sell of a product, unlike traders in asset markets. [ABSTRACT FROM AUTHOR]

A letter to the editor is presented in response to the article "Optimal ordering policies for a retailer in a supply chain with up-stream and down-stream trade credits," written by Teng and Goyal.