IDEAS home Printed from https://ideas.repec.org/a/inm/ormnsc/v46y2000i3p444-450.html
   My bibliography  Save this article

A Supplier's Optimal Quantity Discount Policy Under Asymmetric Information

Author

Listed:
  • Charles J. Corbett

    (The Anderson School at UCLA, 110 Westwood Plaza, Box 951481, Los Angeles, California 90095-1481)

  • Xavier de Groote

    (INSEAD, Fontainebleau, France)

Abstract

In the supply-chain literature, an increasing body of work studies how suppliers can use incentive schemes such as quantity discounts to influence buyers' ordering behaviour, thus reducing the supplier's (and the total supply chain's) costs. Various functional forms for such incentive schemes have been proposed, but a critical assumption always made is that the supplier has full information about the buyer's cost structure. We derive the optimal quantity discount policy under asymmetric information and compare it to the situation where the supplier has full information.

Suggested Citation

  • Charles J. Corbett & Xavier de Groote, 2000. "A Supplier's Optimal Quantity Discount Policy Under Asymmetric Information," Management Science, INFORMS, vol. 46(3), pages 444-450, March.
    • Handle: RePEc:inm:ormnsc:v:46:y:2000:i:3:p:444-450
    DOI: 10.1287/mnsc.46.3.444.12065
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1287/mnsc.46.3.444.12065
    Download Restriction: no
    File URL: https://libkey.io/10.1287/mnsc.46.3.444.12065?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
    ---><---

    References listed on IDEAS

    as
    1. James P. Monahan, 1984. "A Quantity Discount Pricing Model to Increase Vendor Profits," Management Science, INFORMS, vol. 30(6), pages 720-726, June.
    2. Goyal, Suresh K. & Gupta, Yash P., 1989. "Integrated inventory models: The buyer-vendor coordination," European Journal of Operational Research, Elsevier, vol. 41(3), pages 261-269, August.
    3. Hau L. Lee & Meir J. Rosenblatt, 1986. "A Generalized Quantity Discount Pricing Model to Increase Supplier's Profits," Management Science, INFORMS, vol. 32(9), pages 1177-1185, September.
    4. Jean-Jacques Laffont & Jean Tirole, 1993. "A Theory of Incentives in Procurement and Regulation," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262121743, April.
    5. Z. Kevin Weng, 1995. "Channel Coordination and Quantity Discounts," Management Science, INFORMS, vol. 41(9), pages 1509-1522, September.
    6. 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)

    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. Sarmah, S.P. & Acharya, D. & Goyal, S.K., 2006. "Buyer vendor coordination models in supply chain management," European Journal of Operational Research, Elsevier, vol. 175(1), pages 1-15, November.
    2. Chakraborty, Abhishek & Chatterjee, Ashis K., 2016. "A surcharge pricing scheme for supply chain coordination under JIT environment," European Journal of Operational Research, Elsevier, vol. 253(1), pages 14-24.
    3. Sarmah, S.P. & Acharya, D. & Goyal, S.K., 2007. "Coordination and profit sharing between a manufacturer and a buyer with target profit under credit option," European Journal of Operational Research, Elsevier, vol. 182(3), pages 1469-1478, November.
    4. Shin, Hojung & Benton, W.C., 2007. "A quantity discount approach to supply chain coordination," European Journal of Operational Research, Elsevier, vol. 180(2), pages 601-616, July.
    5. Lau, Amy Hing Ling & Lau, Hon-Shiang & Zhou, Yong-Wu, 2008. "Quantity discount and handling-charge reduction schemes for a manufacturer supplying numerous heterogeneous retailers," International Journal of Production Economics, Elsevier, vol. 113(1), pages 425-445, May.
    6. Mutlu, Fatih & Çetinkaya, Sıla, 2020. "Supplier–carrier–buyer channels: Contractual pricing for a carrier serving a supplier–buyer partnership," International Journal of Production Economics, Elsevier, vol. 230(C).
    7. Albert Y. Ha & Lode Li & Shu-Ming Ng, 2003. "Price and Delivery Logistics Competition in a Supply Chain," Management Science, INFORMS, vol. 49(9), pages 1139-1153, September.
    8. Zhou, Yong-Wu & Min, Jie & Goyal, Suresh K., 2008. "Supply-chain coordination under an inventory-level-dependent demand rate," International Journal of Production Economics, Elsevier, vol. 113(2), pages 518-527, June.
    9. Kevin Weng, Z., 1995. "Modeling quantity discounts under general price-sensitive demand functions: Optimal policies and relationships," European Journal of Operational Research, Elsevier, vol. 86(2), pages 300-314, October.
    10. Duan, Lisha & Ventura, José A., 2019. "A Dynamic Supplier Selection and Inventory Management Model for a Serial Supply Chain with a Novel Supplier Price Break Scheme and Flexible Time Periods," European Journal of Operational Research, Elsevier, vol. 272(3), pages 979-998.
    11. Qiu, Xuan & Lee, Chung-Yee, 2019. "Quantity discount pricing for rail transport in a dry port system," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 122(C), pages 563-580.
    12. Chan, Chi Kin & Lee, Y.C.E. & Campbell, J.F., 2013. "Environmental performance—Impacts of vendor–buyer coordination," International Journal of Production Economics, Elsevier, vol. 145(2), pages 683-695.
    13. Charles J. Corbett, 2001. "Stochastic Inventory Systems in a Supply Chain with Asymmetric Information: Cycle Stocks, Safety Stocks, and Consignment Stock," Operations Research, INFORMS, vol. 49(4), pages 487-500, August.
    14. Shi Chen & Hau Lee, 2017. "Incentive Alignment and Coordination of Project Supply Chains," Management Science, INFORMS, vol. 63(4), pages 1011-1025, April.
    15. Son, Joong Y. & Sheu, Chwen, 2008. "The impact of replenishment policy deviations in a decentralized supply chain," International Journal of Production Economics, Elsevier, vol. 113(2), pages 785-804, June.
    16. L Lei & Q Wang & C Fan, 2006. "Optimal business policies for a supplier–transporter–buyer channel with a price-sensitive demand," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 57(3), pages 281-289, March.
    17. Wang, Huihui & Yu, Yimin & Zhang, Wei & Hua, Zhongsheng, 2019. "Procurement strategies for lost-sales inventory systems with all-units discounts," European Journal of Operational Research, Elsevier, vol. 272(2), pages 539-548.
    18. Fangruo Chen, 1999. "Decentralized Supply Chains Subject to Information Delays," Management Science, INFORMS, vol. 45(8), pages 1076-1090, August.
    19. Lee, Chang Hwan, 2001. "Coordinated stocking, clearance sales, and return policies for a supply chain," European Journal of Operational Research, Elsevier, vol. 131(3), pages 491-513, June.
    20. Nihat Altintas & Feryal Erhun & Sridhar Tayur, 2008. "Quantity Discounts Under Demand Uncertainty," Management Science, INFORMS, vol. 54(4), pages 777-792, April.

    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:inm:ormnsc:v:46:y:2000:i:3:p:444-450. 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: Chris Asher (email available below). General contact details of provider: https://edirc.repec.org/data/inforea.html .

    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.