Ever seen books with their covers torn off? This is one of the telltale signs that buyers and suppliers, seeking to optimize their supply chain, have struck a buy-back agreement. While buyers and suppliers need to negotiate such types of deals, finding a mutually advantageous arrangement is no easy feat, especially when it comes to a field as complex as supply-chain economics. Considering all the means available for buyers and suppliers to improve efficiency in their supply chain, professors Víctor Martínez de Albéniz and David Simchi-Levi consider a counter-intuitive mechanism to help buyers and sellers negotiate wisely – wholesale price renegotiation – which they believe can best reduce inefficiency and increase profits for everyone involved.
Authors: David Simchi-Levi, Víctor Martínez de Albéniz
Source: IESE Insight