Coordinating Buyer—Supplier Contracts

The supply chain literature takes a different perspective on supplier-buyer interaction. The most well known model of pairwise supplier-buyer interaction is in supply chain contracting. The scope of the contract is typically limited to the two agents involved in the negotiation at a particular point in time with the assumption that they have agreed to coordinate via some form of contract. Ca-chon (2002) describes the typical sequence of events as follows the supplier offers the retailer a contract the retailer accepts or rejects the contract assuming the retailer accepts the contract, the retailer submits an order quantity, q. 

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