Manufacturers sell their products through Retailers who, in turn, sell the products to consumers. So, for example, Apple (the manufacturer) sells its iPods through major electronic retailers such as Best Buy, WalMart, Circuit City, etc. in the United States. In general, manufacturers sell the product to the retailer at a specified price, usually called the wholesale price, W. The retailers, in turn, charge a mark-up and sell the product to consumers at a retail price, say, P. We want to find some examples of W and P. All manufacturers faces some kind of a per unit production cost function .
There are several common formats for the manufacturer and the retailer in setting their prices: set the prices directly; to set the prices based on an absolute margin; set the prices based on a percentage margin on their costs. Specifically, for the manufacturer, she may choose one of the three price variables in the profit-sharing contract: an absolute wholesale price w; an absolute manufacturer margin m, where w=m+c; or a percentage manufacturer margin , where . For the retailer, he may choose one of the three price variables: an absolute retail price p; an absolute retail margin r, where p=w+r; or a percentage retail margin , where .
We need some following examples, could be from any industry, any written news, reports, surveys.
1. We need a real world example where the contract between a manufacturer and a retailer defines the retail price as the wholesale price plus a fixed amount of retailer margin.
2. we need a real world example where the contract between a manufacturer and a retailer defines the manufacturer’s wholesale price as the per unit production cost plus certain manufacture margin (could be a fixed amount, or certain percentages of the per unit production cost)
3. We need some examples where a manufacturer’s per unit production cost is an increasing function of production quantity. That’s, the more it produces, the more expensive it is to produce each unit product.