Bolton, Gary E.; Bonzelet, Sabrina; Stangl, Tobias; … - In: Production and Operations Management 32 (2022) 4, pp. 1243-1261
demand. Unlike wholesale price contracts, service‐level contracts can be parameterized such that they have steep expected … order closer to optimality under service‐level contracts with steeper expected profit functions. In a laboratory experiment … suggest that managers can benefit by designing service‐level contracts with higher penalty costs and lower fill rates. …
