In this paper we consider a negotiation between a supplier and its retailer. Due to the supplier's commitments with other customers the negotiation is about the maximum order quantity the retailer can order at a fixed price. We propose a structuring for the negotiation that captures two main features: First, we take into account that the supplier can strategically change its production facilities. The impact of this strategic decision is captured by the corresponding change of the supplier's cost situation. Second, we consider the uncertainty about the retailer's future demand due to its own customers. The negotiation takes place with respect to different demand scenarios, yielding a variety of possibilities of avoiding negotiation deadlocks.
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Homburg, C., Schneeweiss, C. Negotiations Within Supply Chains. Computational & Mathematical Organization Theory 6, 47–59 (2000). https://doi.org/10.1023/A:1009673225809
- supply chain management