A generalized framework for quantity discount pricing schedules

A generalized framework for quantity discount pricing schedules

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Article ID: iaor20041502
Country: United States
Volume: 34
Issue: 1
Start Page Number: 173
End Page Number: 188
Publication Date: Dec 2003
Journal: Decision Sciences
Authors: ,
Keywords: programming: mathematical
Abstract:

The use of price to influence a buyer's purchasing behavior and thus improve supply chain coordination has received considerable attention. The vendor and buyer are independent economic entities, each maximizing its own profit. We consider the case of a buyer with fixed annual demand, independent of cost. The vendor's objective is to set a price schedule that encourages the buyer to raise its order quantity, increasing the vendor's profits. We present a unified treatment of the problem, categorize different variations, and provide a common solution procedure for all cases.

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