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Ensuring feasibility in ‘a generalized quantity discount pricing model to increase supplier's profits’

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  • U Buscher

    (Bayerische Julius-Maximilians-University Würzburg)

  • G Lindner

    (Otto-von-Guericke-University Magdeburg)

Abstract

Lee and Rosenblatt examine ordering and quantity discount decisions for a single-vendor–single-buyer system from the perspective of the supplier. By imposing a constraint on the amount of price discount which may be offered to the purchaser they suggest a procedure for determining the optimal solution regarding the underlying planning problem. However, the proposed algorithm can end up with an infeasible solution. In this paper, we analyse the reason why this may happen and provide a fast computational procedure which simultaneously guarantees optimality and feasibility.

Suggested Citation

  • U Buscher & G Lindner, 2004. "Ensuring feasibility in ‘a generalized quantity discount pricing model to increase supplier's profits’," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 55(6), pages 667-670, June.
    • Handle: RePEc:pal:jorsoc:v:55:y:2004:i:6:d:10.1057_palgrave.jors.2601702
    DOI: 10.1057/palgrave.jors.2601702
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    References listed on IDEAS

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    1. 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.
    2. 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.
    3. 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.
    4. James P. Monahan, 1984. "A Quantity Discount Pricing Model to Increase Vendor Profits," Management Science, INFORMS, vol. 30(6), pages 720-726, June.
    5. 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.
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    Cited by:

    1. Viktoryia Buhayenko & Sin C. Ho & Anders Thorstenson, 2018. "A variable neighborhood search heuristic for supply chain coordination using dynamic price discounts," EURO Journal on Transportation and Logistics, Springer;EURO - The Association of European Operational Research Societies, vol. 7(4), pages 363-385, December.

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