Discounting decision for enterprises with high fixed cost and low variable cost

Higher sales are the key to increased profit, especially for low variable cost industries. The use of quantity discount to promote business is an important way to increase sales. This study evaluates the use of discount, prepaid, multiple-purchase credit to increase sales. The purpose is to develop a strategy to maximize the unit revenue by simultaneously determining the discount rate and utility. A numerical example and sensitivity analysis are given to illustrate the theory.