A study on contract strategy in book and magazine distribution systems

Yasuhiko Takemoto, Motoki Satoh, Ikuo Arizono

Research output: Contribution to journalArticle

Abstract

The transactions of books and magazines in Japan have been made under the resale price maintenance and consignment sale systems. Nowadays, the return rate of books and magazines has reached approximately 40 percent of the quantity of publications. This is a serious problem from the viewpoints of both business and the environment. On one hand, a new sale system where the wholesale price is inexpensive while the buyback price is cheap has been programmed and practiced. In the new sale system, the wholesale price and buyback price are important contract parameters. In this article, we formulate a book and magazine distribution system with publisher and retail store as a mathematical model. Then, a new decision procedure for contract parameters such as the wholesale price and buyback price is discussed and suggested using the conventional coordination approach and game theory.

Original languageEnglish
Pages (from-to)76-83
Number of pages8
JournalJournal of Japan Industrial Management Association
Volume63
Issue number2
Publication statusPublished - 2012

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Keywords

  • Buyback contract
  • Consignment sale system
  • Coordination approach
  • Incentive compatible condition
  • Nash bargaining solution
  • Resale price maintenance system

ASJC Scopus subject areas

  • Industrial and Manufacturing Engineering
  • Applied Mathematics
  • Management Science and Operations Research
  • Strategy and Management

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