One time only incentives and inventory policies

This paper presents a review of the literature available on inventory policies under incentives on a one time only basis. It is quite a common industrial practice to offer special incentives to motivate the buyer to order in larger than regular order quantities. Such special deals are available for a limited time only. The literature on inventory policies under conditions of incentives has been classified by the nature of incentives such as price discount and credit period. A situation of announced price increase which is very similar to price discount is also reviewed. The policy implications of various scenarios are highlighted and areas of future research are identified.