Abstract 

This case describes the sourcing challenge faced by a firm which is involved in contract manufacturing of a device. The company must decide whether to continue as a contract manufacturer where they are engaged in a wholesale price contract, or they should get into the development of their channel by engaging with the design firm through a revenue sharing contract.

Learning Objective 

The case provides a basic understanding to the students on two supply chain contracts namely: wholesale price contract and revenue sharing contract. The case teaches students about how different contracting structures mitigate risk and can be attractive for both the players in the supply chain.