Which buyback price, would maximize channel profit

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Question: Consider again the case where the WP focuses only on the production of papers and Ralph is responsible for selling the papers to the customers. But now assume that Ralph and WP want to use a buyback coordinating mechanism. If the production cost of each paper is $0.25, the wholesale price (i.e., the price that the WP charges Ralph for each paper) is $0.6 the retail price is $1 and the daily demand is normally distributed with mean 500 and standard deviation 10 then,

Which buyback price, b, would maximize channel profit (i.e., which buyback price would coordinate the supply chain)?

Reference no: EM133382066

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