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| Exogenous parameters |
| Regular contract price that the supplier quotes to the retailer |
| Regular selling price of the product |
| Unit price at which the supplier salvages surplus products |
| Development cost coefficient |
| Innovation level |
| Consumer’s discount factor that applies to the second-period purchase |
| Impact intensity of predecessors on the willingness to pay of consumers who purchase in the second period |
| A financial parameter denoting the fraction that the precommitted order extends to its total value |
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| Uncertainty-related notation |
| Number of predecessors who purchase the product in the first period |
| Consumer preference for the innovation level |
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| Decision variables |
| Advance selling discount set by the supplier |
| Advance selling discount set by the retailer |
| Advance selling discount set by the supplier when there is a constraint on the precommitted order quantity |
| Advance selling discount set by the retailer when there is a constraint on the precommitted order quantity |
| Threshold of consumer preference when there is no advance purchase behavior in the supply chain |
| Threshold of consumer preference in the period when there are two advance selling discounts |
| Consumer demand when there is no advance purchase behavior in the supply chain |
| Consumer demand in the period when there are two advance selling discounts |
| Consumer total demand in the first and second periods |
| Minimum precommitted order quantity set by the supplier |
| Consumer demand in the period when there is a constraint on the precommitted order quantity |
| Consumer net utility when there is no advance purchase behavior in the supply chain |
| Consumer net utility in the period when there are two advance selling discounts |
| The consumers’ net utility if they delay the purchase decision until the second period |
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