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| Author: | Rubin, P. A. Benton, W. C. |
| Title: | A Generalized Framework for Quantity Discount Pricing Schedules |
| Journal: | Decision Sciences
2003 : WINTER, VOL. 34:1, p. 173-188 |
| Index terms: | MATERIALS MANAGEMENT MATHEMATICAL PROGRAMMING OPTIMIZATION PRICING |
| Language: | eng |
| Abstract: | The treatment of quantity discounts in the inventory and purchasing literature has tended to be from the buyer's perspective. 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. The authors 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. The authors present a unified treatment of the problem, categorize different variations, and provide a common solution procedure for all cases. |
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