16 Questions
What are the assumptions that underpin the game-theoretic model?
The selling cost for the retailer is normalized to zero
In the model, what advantage does the retailer typically enjoy in the sales process?
The retailer has zero production cost
What are the two distribution channels respectively facing?
Inverse demand functions
What does the model assume about the selling cost for the retailer?
It is normalized to zero
What is assumed about the production cost for the manufacturer in the model?
It is normalized to zero
Why does the model assume a selling cost of c per unit of product sold in the direct channel for the manufacturer?
To represent the efficiency of the manufacturer in retail operations
What does the symbol θ represent in the context of the dual-channel supply chain model?
The channel substitutability
What does 'a > c' signify in the dual-channel supply chain model?
Manufacturer's ability to sell through both channels
Why is the linear demand function used in the dual-channel supply chain model?
To accommodate consumer variety and channel preferences
What does the parameter 'b' represent in the dual-channel supply chain model?
Price sensitivity to demand
According to the given text, what does 'θ ∈ (0, 1)' imply about channel substitutability?
It implies partial substitutability between channels
What does 'a' represent in the context of the dual-channel supply chain model?
Market size
What does the inequality 'a/c > 3 - θ / ((1 - θ )(3 + θ ))' ensure in the dual-channel supply chain model?
Manufacturer's ability to sell through both channels in equilibrium
What is the main implication of specifying differentiation between channels in terms of variety rather than quality?
Consumers have different channel preferences based on product variety
What is one of the reasons for consumers to avoid online shopping, as mentioned in the text?
"Try-before-you-buy" experience available in physical stores
'Some consumers may avoid offline shopping in bricks-and-mortar stores owing to shopping costs and nuisances' - What does this statement suggest about consumer behavior?
"Shopping costs and nuisances" influence offline shopping decisions
Test your understanding of the assumptions underlying game-theoretic models for supply chain structures. Explore the variables used in the model and the structure of the supply chain considered. This quiz delves into the concepts of direct and indirect sales channels in supply chain models.
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