IDEAS home Printed from https://ideas.repec.org/a/eee/proeco/v135y2012i1p255-264.html
   My bibliography  Save this article

Discount pricing for a family of items: The supplier's optimal decisions

Author

Listed:
  • Ke, Ginger Y.
  • Bookbinder, James H.

Abstract

Consider a family of SKUs for which the supplier will offer a quantity discount, according to the aggregate purchases of the product group. Management of those items is based on the modified periodic policy. From the supplier's point of view, what are the optimal parameters (breakpoint and discount percentage)? For deterministic demand, we discuss the cases in which demand is both constant and price-sensitive. First as a noncooperative Stackelberg game, and then when the two parties make the discount and replenishment decisions jointly, we illustrate the impact of price-sensitivity and joint decision making on the supplier's discount policy.

Suggested Citation

  • Ke, Ginger Y. & Bookbinder, James H., 2012. "Discount pricing for a family of items: The supplier's optimal decisions," International Journal of Production Economics, Elsevier, vol. 135(1), pages 255-264.
    • Handle: RePEc:eee:proeco:v:135:y:2012:i:1:p:255-264
    DOI: 10.1016/j.ijpe.2011.07.016
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0925527311003173
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ijpe.2011.07.016?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Chen, Tsung-Hui & Chen, Jen-Ming, 2005. "Optimizing supply chain collaboration based on joint replenishment and channel coordination," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 41(4), pages 261-285, July.
    2. Shi, Jianmai & Zhang, Guoqing, 2010. "Multi-product budget-constrained acquisition and pricing with uncertain demand and supplier quantity discounts," International Journal of Production Economics, Elsevier, vol. 128(1), pages 322-331, November.
    3. Moon, I.K. & Cha, B.C., 2006. "The joint replenishment problem with resource restriction," European Journal of Operational Research, Elsevier, vol. 173(1), pages 190-198, August.
    4. Khouja, Moutaz & Goyal, Suresh, 2008. "A review of the joint replenishment problem literature: 1989-2005," European Journal of Operational Research, Elsevier, vol. 186(1), pages 1-16, April.
    5. Amiya K. Chakravarty, 1984. "Joint Inventory Replenishments with Group Discounts Based on Invoice Value," Management Science, INFORMS, vol. 30(9), pages 1105-1112, September.
    6. Jiefeng Xu & Leonard Lu & Fred Glover, 2000. "The deterministic multi-item dynamic lot size problem with joint business volume discount," Annals of Operations Research, Springer, vol. 96(1), pages 317-337, November.
    7. Maqbool Dada & K. N. Srikanth, 1987. "Pricing Policies for Quantity Discounts," Management Science, INFORMS, vol. 33(10), pages 1247-1252, October.
    8. repec:inm:ormnsc:v:30:y:1984:i:12:p:1524-1539(2 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ata Allah Taleizadeh & Hadi Samimi & Babak Mohammadi, 2015. "Joint replenishment policy with backordering and special sale," International Journal of Systems Science, Taylor & Francis Journals, vol. 46(7), pages 1172-1198, May.
    2. Wang, Jian-Cai & Lau, Amy Hing-Ling & Lau, Hon-Shiang, 2012. "Practical and effective contracts for the dominant retailer of a newsvendor product with price-sensitive demand," International Journal of Production Economics, Elsevier, vol. 138(1), pages 46-54.
    3. Ke, Ginger Y. & Bookbinder, James H., 2018. "Coordinating the discount policies for retailer, wholesaler, and less-than-truckload carrier under price-sensitive demand: A tri-level optimization approach," International Journal of Production Economics, Elsevier, vol. 196(C), pages 82-100.
    4. Muriel, Ana & Chugh, Tammana & Prokle, Michael, 2022. "Efficient algorithms for the joint replenishment problem with minimum order quantities," European Journal of Operational Research, Elsevier, vol. 300(1), pages 137-150.
    5. Ji Seong Noh & Jong Soo Kim & Biswajit Sarkar, 2019. "Stochastic joint replenishment problem with quantity discounts and minimum order constraints," Operational Research, Springer, vol. 19(1), pages 151-178, March.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Flapper, Simme Douwe P. & González-Velarde, José Luis & Smith, Neale R. & Escobar-Saldívar, Luis Jacob, 2010. "On the optimal product assortment: Comparing product and customer based strategies," International Journal of Production Economics, Elsevier, vol. 125(1), pages 167-172, May.
    2. Xuefei Shi & Haiyan Wang, 2022. "Design of the cost allocation rule for joint replenishment to an overseas warehouse with a piecewise linear holding cost rate," Operational Research, Springer, vol. 22(5), pages 4905-4929, November.
    3. Pundoor, Guruprasad & Chen, Zhi-Long, 2009. "Joint cyclic production and delivery scheduling in a two-stage supply chain," International Journal of Production Economics, Elsevier, vol. 119(1), pages 55-74, May.
    4. He-Yau Kang & Amy H.I. Lee & Chien-Wei Wu & Cheng-Han Lee, 2017. "An efficient method for dynamic-demand joint replenishment problem with multiple suppliers and multiple vehicles," International Journal of Production Research, Taylor & Francis Journals, vol. 55(4), pages 1065-1084, February.
    5. Ongkunaruk, P. & Wahab, M.I.M. & Chen, Y., 2016. "A genetic algorithm for a joint replenishment problem with resource and shipment constraints and defective items," International Journal of Production Economics, Elsevier, vol. 175(C), pages 142-152.
    6. Saravanan Venkatachalam & Arunachalam Narayanan, 2016. "Efficient formulation and heuristics for multi-item single source ordering problem with transportation cost," International Journal of Production Research, Taylor & Francis Journals, vol. 54(14), pages 4087-4103, July.
    7. Carvajal, Jimmy & Castaño, Fabian & Sarache, William & Costa, Yasel, 2020. "Heuristic approaches for a two-echelon constrained joint replenishment and delivery problem," International Journal of Production Economics, Elsevier, vol. 220(C).
    8. Tamar Cohen-Hillel & Liron Yedidsion, 2018. "The Periodic Joint Replenishment Problem Is Strongly 𝒩𝒫-Hard," Mathematics of Operations Research, INFORMS, vol. 43(4), pages 1269-1289, November.
    9. Shiyu Liu & Ou Liu & Xiaoming Jiang, 2023. "An Efficient Algorithm for the Joint Replenishment Problem with Quantity Discounts, Minimum Order Quantity and Transport Capacity Constraints," Mathematics, MDPI, vol. 11(4), pages 1-18, February.
    10. Benton, W. C. & Park, Seungwook, 1996. "A classification of literature on determining the lot size under quantity discounts," European Journal of Operational Research, Elsevier, vol. 92(2), pages 219-238, July.
    11. Amaya, Ciro Alberto & Carvajal, Jimmy & Castaño, Fabian, 2013. "A heuristic framework based on linear programming to solve the constrained joint replenishment problem (C-JRP)," International Journal of Production Economics, Elsevier, vol. 144(1), pages 243-247.
    12. Chan, Chi Kin & Lee, Y.C.E., 2012. "A co-ordination model combining incentive scheme and co-ordination policy for a single-vendor–multi-buyer supply chain," International Journal of Production Economics, Elsevier, vol. 135(1), pages 136-143.
    13. Padilla Tinoco, Silvia Valeria & Creemers, Stefan & Boute, Robert N., 2017. "Collaborative shipping under different cost-sharing agreements," European Journal of Operational Research, Elsevier, vol. 263(3), pages 827-837.
    14. Jiafu Tang & Kai-Leung Yung & Iko Kaku & Jianbo Yang, 2008. "The scheduling of deliveries in a production-distribution system with multiple buyers," Annals of Operations Research, Springer, vol. 161(1), pages 5-23, July.
    15. Kouki, Chaaben & Babai, M. Zied & Jemai, Zied & Minner, Stefan, 2016. "A coordinated multi-item inventory system for perishables with random lifetime," International Journal of Production Economics, Elsevier, vol. 181(PA), pages 226-237.
    16. Bo Dai & Fenfen Li, 2021. "Joint Inventory Replenishment Planning of an E-Commerce Distribution System with Distribution Centers at Producers’ Locations," Logistics, MDPI, vol. 5(3), pages 1-14, July.
    17. Wang, Lin & He, Jing & Wu, Desheng & Zeng, Yu-Rong, 2012. "A novel differential evolution algorithm for joint replenishment problem under interdependence and its application," International Journal of Production Economics, Elsevier, vol. 135(1), pages 190-198.
    18. Schotanus, Fredo & Telgen, Jan & de Boer, Luitzen, 2008. "Unfair allocation of gains under the Equal Price allocation method in purchasing groups," European Journal of Operational Research, Elsevier, vol. 187(1), pages 162-176, May.
    19. Crama, Y. & Pascual J., R. & Torres, A., 2004. "Optimal procurement decisions in the presence of total quantity discounts and alternative product recipes," European Journal of Operational Research, Elsevier, vol. 159(2), pages 364-378, December.
    20. Chan, Chi Kin & Fang, Fei & Langevin, André, 2018. "Single-vendor multi-buyer supply chain coordination with stochastic demand," International Journal of Production Economics, Elsevier, vol. 206(C), pages 110-133.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:proeco:v:135:y:2012:i:1:p:255-264. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ijpe .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.