We examine the buyer's problem of inducing the supplier's quality effort using two arrangements: the appraisal regime and the certification regime. In the appraisal regime, the buyer inspects the units supplied and either charges a penalty for defective units identified during inspection or pays...

Vendor-managed inventory (VMI) is emerging as a significant development in the recent trend towards collaboration and information sharing in supply chain management. Transfer of inventory monitoring and other overhead costs to manufacturers and continuous replenishment of retailer inventory are...

Delegating pricing decisions to the salesforce has been a salient issue for marketing academics and practitioners. We examine this issue in a competitive market using standard agency theory with symmetric and asymmetric information. Under symmetric information we find that the optimal contracts...

The issue of delegating pricing responsibility to the salesforce is of interest to marketing academics and practitioners. It has been shown by Lal (1986) that under certain situations with information asymmetry, it is more profitable for the firm to delegate pricing authority to the salesforce...