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The Role of Quantity Discounts in the Presence of Heterogeneous Buyers

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  • Z. Kevin Weng
  • Amy Zeng

Abstract

In this paper we develop a model to examine the role of quantity discounts in synchronizing production and order cycles for a system consisting of one manufacturer and two heterogeneous buyers. The model developed can serve as a guideline for the manufacturer and the buyers as how to integrate their decisions to achieve higher benefits. The numerical examples indicate that the benefit of synchronization decreases with the degree of heterogeneity of the buyers. The conditions under which it is profitable for the manufacturer to synchronize with the heterogeneous buyers are demonstrated through numerical examples. Copyright Kluwer Academic Publishers 2001

Suggested Citation

  • Z. Kevin Weng & Amy Zeng, 2001. "The Role of Quantity Discounts in the Presence of Heterogeneous Buyers," Annals of Operations Research, Springer, vol. 107(1), pages 369-383, October.
    • Handle: RePEc:spr:annopr:v:107:y:2001:i:1:p:369-383:10.1023/a:1014979822085
    DOI: 10.1023/A:1014979822085
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    Citations

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    Cited by:

    1. 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.
    2. Qi, Xiangtong, 2007. "Order splitting with multiple capacitated suppliers," European Journal of Operational Research, Elsevier, vol. 178(2), pages 421-432, April.
    3. Qi, Xiangtong & Bard, Jonathan F. & Yu, Gang, 2004. "Supply chain coordination with demand disruptions," Omega, Elsevier, vol. 32(4), pages 301-312, August.

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