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Determination of suppliers' optimal quantity discount schedules with heterogeneous buyers

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  • Qinan Wang

Abstract

Although the quantity discount problem has been extensively studied in the realm of a single supplier and a single buyer, it is not well understood when a supplier has many different buyers. This paper presents an analysis of a supplier's quantity discount decision when there are many buyers with different demand and cost structures. A common discrete all‐unit quantity discount schedule with many break points is used. After formulating the model, we first analyze buyers' responses to a general discrete quantity discount schedule. This analysis establishes a framework for a supplier to formulate his quantity discount decision. Under this framework, the supplier's optimal quantity discount schedule can be formulated and solved by a simple non‐linear programming model. The applicability of the model is discussed with an application for a large U.S. distribution network. © 2002 John Wiley & Sons, Inc. Naval Research Logistics, 49: 46–59, 2002; DOI 10.1002/nav.1052

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  • Qinan Wang, 2002. "Determination of suppliers' optimal quantity discount schedules with heterogeneous buyers," Naval Research Logistics (NRL), John Wiley & Sons, vol. 49(1), pages 46-59, February.
    • Handle: RePEc:wly:navres:v:49:y:2002:i:1:p:46-59
    DOI: 10.1002/nav.1052
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    References listed on IDEAS

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    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. George Q. Huang & Wanli Chen & Haiyan Song & Xinyan Zhang, 2010. "Game-Theoretic Study of the Dynamics of Tourism Supply Chains for Package Holidays under Quantity Competition," Tourism Economics, , vol. 16(1), pages 197-216, March.
    3. 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.
    4. Kwon, Yong Woo & Sheu, Jiuh-Biing & Yoo, Seung Ho, 2022. "Quadratic quantity discount contract under price-dependent demand and consumer returns," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 164(C).
    5. Qinan Wang, 2004. "Coordinating independent buyers with integer‐ratio time coordination and quantity discounts," Naval Research Logistics (NRL), John Wiley & Sons, vol. 51(3), pages 316-331, April.
    6. Konstantin Kogan, 2019. "Discounting revisited: evolutionary perspectives on competition and coordination in a supply chain with multiple retailers," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 27(1), pages 69-92, March.

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