Sherman’s Supply Chain Challenge case study
Case: Sherman’s Supply Chain Challenge
Stopping the Retailer from Overcharging for Soda
MGMT 484 – Supply Chain Management
Conduct a case analysis and submit a 3 – 4 page case write-up based on the
questions below.
This short case describes pricing issues in a single supplier/single buyer supply chain. It
illustrates the impact of double marginalization on members of a supply chain, including
consumers. You will use the case to determine optimal prices when faced with linear demand
functions, demonstrate the power of supply chain coordination, and discover ways to naturally
induce supply chain cooperation.
ASSIGNMENT QUESTIONS
1.
What is the best retail price and resulting monthly demand?
2.
How can Sherman encourage the retailer to lower the retail price to that level to boost
demand without eating into Sherman’s own profit?
3.
What should the wholesale price be?
4.
Is the only alternative to sell directly to customers?