
Efficient consumer response in fashion retail supply chain systems 61
⇔
r + τ − c
r − v − λ
=
r + τ − m
r − v
⇔(r + τ − c)(r − v) =(r − v − λ)(r + τ − m)
⇔λ =
(r − v)(c − m)
r + τ − m
. (Q.E.D.)
Proposition 4.4 illustrates the use of the markdown contract to coordinate the
fashion retail supply chain system. It is important to observe that when the consumer
welfare coefficient increases, the markdown sponsor λ decreases.
As a remark, there are other related studies which propose different measures
to enhance the supply chain performance under a program similar to the efficient
consumer response program. For instance, Iyer and Bergen (1997) propose service
level ...