This paper analyses coordination in a supply chain consisting of a supplier and a retailer, where the retailer has the opportunity to return products at midlife and end-of-life. The paper examines particularly the coordination problem when the supplier has the opportunity to realise a limited amount of overstock items at a higher price than the retailer at midlife. In this paper return options are introduced in the channel, where an option gives the holder the right to return a product at midlife in exchange for a pre-specified amount of money. It is shown that the supplier must, to achieve coordination, determine one exercise price of the options and two return rebates, where the latter guarantee the retailer an amount of money for each product returned, at midlife and end-of-life, without a corresponding option. Conditions for pricing of return options and conditions for wholesale prices are derived as well. A numerical study shows that the supplier is better off when the number of return options increases. The numerical study also shows that the coordinating option price is relatively unaffected by the return rebate in the second period, but is more dependent on the exercise price and return rebate at midlife, which in turn are dependent on the production costs.
{"title":"Coordination of Limited Commercial Return","authors":"Jens Bengtsson","doi":"10.2139/ssrn.970473","DOIUrl":"https://doi.org/10.2139/ssrn.970473","url":null,"abstract":"This paper analyses coordination in a supply chain consisting of a supplier and a retailer, where the retailer has the opportunity to return products at midlife and end-of-life. The paper examines particularly the coordination problem when the supplier has the opportunity to realise a limited amount of overstock items at a higher price than the retailer at midlife. In this paper return options are introduced in the channel, where an option gives the holder the right to return a product at midlife in exchange for a pre-specified amount of money. It is shown that the supplier must, to achieve coordination, determine one exercise price of the options and two return rebates, where the latter guarantee the retailer an amount of money for each product returned, at midlife and end-of-life, without a corresponding option. Conditions for pricing of return options and conditions for wholesale prices are derived as well. A numerical study shows that the supplier is better off when the number of return options increases. The numerical study also shows that the coordinating option price is relatively unaffected by the return rebate in the second period, but is more dependent on the exercise price and return rebate at midlife, which in turn are dependent on the production costs.","PeriodicalId":133518,"journal":{"name":"Norwegian School of Economics","volume":"81 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2005-12-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123091344","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Paper ini membahas dampak ekonomi dari subsidi terhadap industri yang dapat menarik minat investor pada daerah tertentu. Dengan mempergunakan EMERALD (Equilibrium Model with Economic Regional Analysis Dimensions) yang merupakan model CGE multi region untuk Indonesia, paper ini menganalisa beberapa simulasi alternatif pembiayaan subsidi industri Tekstil di Jawa Tengah. Hasil yang diperoleh menunjukkan bahwa subsidi atas industri Tekstil dengan sumber pendanaan bukan pajak akan meningkatkan daya saing industri Tekstil diatas biaya sektor tradable secara keseluruhan. Secara riil, subsidi ini akan meningkatkan PDRB Jawa Tengah sebesar 0.21%. Jika subsidi tersebut dibiayai dari pengenaan pajak atas rumah tangga, akan meningkatkan PDRB Jawa Tengah sebesar 0.11%. Keyword : Regional, Computable General Equilibrium, investment, subsidy JEL : C68, D92, E62, O18
{"title":"Illustrative Subsidy Variations to Attract Investors: Using the Emerald-Indonesian Multi-Regional CGE Model","authors":"D. Pambudi, Andi M. Alfian Parewangi","doi":"10.21098/BEMP.V7I3.115","DOIUrl":"https://doi.org/10.21098/BEMP.V7I3.115","url":null,"abstract":"Paper ini membahas dampak ekonomi dari subsidi terhadap industri yang dapat menarik minat investor pada daerah tertentu. Dengan mempergunakan EMERALD (Equilibrium Model with Economic Regional Analysis Dimensions) yang merupakan model CGE multi region untuk Indonesia, paper ini menganalisa beberapa simulasi alternatif pembiayaan subsidi industri Tekstil di Jawa Tengah. Hasil yang diperoleh menunjukkan bahwa subsidi atas industri Tekstil dengan sumber pendanaan bukan pajak akan meningkatkan daya saing industri Tekstil diatas biaya sektor tradable secara keseluruhan. Secara riil, subsidi ini akan meningkatkan PDRB Jawa Tengah sebesar 0.21%. Jika subsidi tersebut dibiayai dari pengenaan pajak atas rumah tangga, akan meningkatkan PDRB Jawa Tengah sebesar 0.11%. Keyword : Regional, Computable General Equilibrium, investment, subsidy JEL : C68, D92, E62, O18","PeriodicalId":133518,"journal":{"name":"Norwegian School of Economics","volume":"69 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2004-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121591463","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We argue that many firms become publicly traded on a stock exchange as the first stage of a longer term divestment plan. Making a direct sale of unlisted stock may be associated with great adverse selection costs. The publicly listed stock price reduces adverse selection by aggregating the information of several investors, and this market valuation, rather than the cash infusion, could be the main benefit of an initial public offering. This theory provides a unified treatment of a whole range of empirical observations, in particular why initial owners frequently exit completely subsequent to an initial public offering (IPO) and why the number of stock market introductions increases with the stock price level. The model also reformulates the ”sweet taste” explanation of IPO underpricing in a way which is consistent with recent evidence. Finally, we argue that the number of firms which go public is inefficiently large.
{"title":"The Stock Market as a Screening Device and the Decision to Go Public","authors":"Tore Ellingsen, Kristian Rydqvist","doi":"10.2139/ssrn.75358","DOIUrl":"https://doi.org/10.2139/ssrn.75358","url":null,"abstract":"We argue that many firms become publicly traded on a stock exchange as the first stage of a longer term divestment plan. Making a direct sale of unlisted stock may be associated with great adverse selection costs. The publicly listed stock price reduces adverse selection by aggregating the information of several investors, and this market valuation, rather than the cash infusion, could be the main benefit of an initial public offering. This theory provides a unified treatment of a whole range of empirical observations, in particular why initial owners frequently exit completely subsequent to an initial public offering (IPO) and why the number of stock market introductions increases with the stock price level. The model also reformulates the ”sweet taste” explanation of IPO underpricing in a way which is consistent with recent evidence. Finally, we argue that the number of firms which go public is inefficiently large.","PeriodicalId":133518,"journal":{"name":"Norwegian School of Economics","volume":"11 5","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1998-04-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"120843954","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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