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There are various discount strategies of the supplier to the retailer in the business filed. One of the common business discount strategy is the first-time buyer offer. This article considers an optimal inventory policy of the retailer for such discount strategy of the supplier. A finite horizon with constant demand is considered. A closed form solution to the optimal number of orders and optimal order quantities are obtained. Numerical example is considered to support theoretical results. Sensitivity analysis is carried out to find the effect of each parameter of the model on the optimal policy.

An Inventory Policy for Discount only for the First Purchase