Coping with Gray Markets: The Impact of Market Conditions and Product Characteristics

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Coping with Gray Markets: The Impact of Market Conditions and Product Characteristics

Gray markets, also known as parallel imports, have created fierce competition for manufacturers in many industries. We analyze the impact of parallel importation on a price-setting manufacturer that serves two markets with uncertain demand, and characterize her policy against parallel importation. We show that ignoring demand uncertainty can take a significant toll on the manufacturer’s profit,...

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15 صفحه اول

Gray Markets, A Product of Demand Uncertainty and Excess Inventory

Diverting large quantities of goods from authorized distribution channels to unauthorized or “gray market” channels, albeit legal, significantly affects both firms and consumers due to effects on price, revenue, service and warranty availability, and product availability. In this paper we consider mechanisms by which the uncertainty surrounding inventory ordering decisions drives gray markets. ...

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ژورنال

عنوان ژورنال: Production and Operations Management

سال: 2015

ISSN: 1059-1478

DOI: 10.1111/poms.12319