The supply chain profit is higher if each stage of the supply chain independently makes its pricing decisions with the objective of maximizing its own profit.

Question

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In a supply chain, each stage's pricing decision can impact the other stages, leading to suboptimal outcomes for the entire supply chain. It is important to coordinate pricing decisions among different stages to achieve the overall supply chain profit maximization. This concept is known as supply chain coordination.

The Supply Chain Profit Is Higher If Each Stage of the Supply