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?