Coordination Mechanisms for the Two-Echelon Newsvendor Model with Rapidly Responsive and Strategic Consumers

Table 1

Notations.

Notation	Description
Parameters
h	Retail price in the second stage
Xi	The demand for product in the i stage, i = 1, 2
Fi (x)	Distribution function of random variable Xi
fi (x)	Distribution density function of random variable Xi
c1	Unit production cost of the product when the first order is placed
c2	Unit production cost of the product when the second order is placed
S	Unit residual value of remaining product after the sales period
	Consumersʼ valuation of product during normal sales period
r	Consumers’ reservation price for product during normal sales period
Decision variables
	Retail price in the first stage
Q	Retailerʼs initial order quantity