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| Author: | Kim, K. H. Hwang, H. |
| Title: | Simultaneous improvement of supplier's profit and buyer's cost by utilizing quantity discount |
| Journal: | Journal of the Operational Research Society
1989 : MAR, VOL. 40:3, p. 255-265 |
| Index terms: | QUANTITY DISCOUNT RATE BUYING CUSTOMERS SALES PROMOTION PROFIT |
| Language: | eng |
| Abstract: | The way is analysed how the supplier can formulate the terms of a quantity-discount pricing schedule, assuming that the buyer always behaves optimally. Formulas are derived for price and order size which maximize the economic gain of the supplier resultant from revising price and order size, the gain of the buyer, and the sum of the gains of both parties. It is suggested then, how the supplier, or the customer, can determine the parameters of an all-unit and incremental quantity-discount system to make the customer, or the supplier, willingly increase or decrease the order size, or the price, to an intended level. |
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