| Author: | Viswanathan, S. Wang, Q. |
| Title: | Discount pricing decisions in distribution channels with price-sensitive demand |
| Journal: | European Journal of Operational Research
2003 : SEP, VOL. 149:3, p. 571-587 |
| Index terms: | Distribution channels Price theory |
| Freeterms: | Inventory |
| Language: | eng |
| Abstract: | The authors evaluate the effectiveness of quantity discounts and volume discounts as cordination mechanisms in distribution channels with demand that is price-sensitive. They consider a single-vendor, single-retailer, distribution channel. The results demonstrate that the effectiveness of volume discount as a coordination mechanism is higher when the sensitivity of demand to price changes is higher. The effectiveness of quantity discount, on the other hand, is higher with lower price sensitivity of demand. The results also demonstrate that perfect coordination is achieved when volume and quantity discounts are offered simultaneously. |
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