Ensuring feasibility in ‘a generalized quantity discount pricing model to increase supplier's profits’

Ensuring feasibility in ‘a generalized quantity discount pricing model to increase supplier's profits’

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Article ID: iaor20051238
Country: United Kingdom
Volume: 55
Issue: 6
Start Page Number: 667
End Page Number: 670
Publication Date: Jun 2004
Journal: Journal of the Operational Research Society
Authors: ,
Keywords: discounts
Abstract:

Lee and Rosenblatt examine ordering and quantity discount decisions for a single-vendor–single-buyer system from the perspective of the supplier. By imposing a constraint on the amount of price discount which may be offered to the purchaser they suggest a procedure for determining the optimal solution regarding the underlying planning problem. However, the proposed algorithm can end up with an infeasible solution. In this paper, we analyse the reason why this may happen and provide a fast computational procedure which simultaneously guarantees optimality and feasibility.

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