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General models for the supplier's all‐unit quantity discount policy

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  • Z. Kevin Weng
  • Richard T. Wong

Abstract

The purpose of this article is to investigate some managerial insights related to using the all‐unit quantity discount policies under various conditions. The models developed here are general treatments that deal with four major issues: (a) one buyer or multiple buyers, (b) constant or price‐elastic demand, (c) the relationship between the supplier's production schedule or ordering policy and the buyers' ordering sizes, and (d) the supplier either purchasing or manufacturing the item. The models are developed with two objectives: the supplier's profit improvement or the supplier's increased profit share analysis. Algorithms are developed to find optimal decision policies. Our analysis provides the supplier with both the optimal all‐unit quantity discount policy and the optimal production (or ordering) strategy. Numerical examples are provided. © 1993 John Wiley & Sons. Inc.

Suggested Citation

  • Z. Kevin Weng & Richard T. Wong, 1993. "General models for the supplier's all‐unit quantity discount policy," Naval Research Logistics (NRL), John Wiley & Sons, vol. 40(7), pages 971-991, December.
    • Handle: RePEc:wly:navres:v:40:y:1993:i:7:p:971-991
    DOI: 10.1002/1520-6750(199312)40:73.0.CO;2-T
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    References listed on IDEAS

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    1. S. K. Goyal, 1987. "Note---Comment on: A Generalized Quantity Discount Pricing Model to Increase Supplier's Profits," Management Science, INFORMS, vol. 33(12), pages 1635-1636, December.
    2. James P. Monahan, 1984. "A Quantity Discount Pricing Model to Increase Vendor Profits," Management Science, INFORMS, vol. 30(6), pages 720-726, June.
    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. repec:inm:ormnsc:v:30:y:1984:i:12:p:1524-1539(2 is not listed on IDEAS
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    Cited by:

    1. Qinan Wang & Ruifang Wang, 2005. "Quantity discount pricing policies for heterogeneous retailers with price sensitive demand," Naval Research Logistics (NRL), John Wiley & Sons, vol. 52(7), pages 645-658, October.
    2. Ponte, Borja & Puche, Julio & Rosillo, Rafael & de la Fuente, David, 2020. "The effects of quantity discounts on supply chain performance: Looking through the Bullwhip lens," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 143(C).
    3. Charles L. Munson & Jianli Hu & Meir J. Rosenblatt, 2003. "Teaching the Costs of Uncoordinated Supply Chains," Interfaces, INFORMS, vol. 33(3), pages 24-39, June.

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