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General models for the supplier's all‐unit quantity discount policy
Author(s) -
Weng Z. Kevin,
Wong Richard T.
Publication year - 1993
Publication title -
naval research logistics (nrl)
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.665
H-Index - 68
eISSN - 1520-6750
pISSN - 0894-069X
DOI - 10.1002/1520-6750(199312)40:7<971::aid-nav3220400708>3.0.co;2-t
Subject(s) - purchasing , profit (economics) , microeconomics , production (economics) , operations research , economics , schedule , unit (ring theory) , production schedule , supplier relationship management , computer science , industrial organization , business , operations management , supply chain , supply chain management , marketing , mathematics , mathematics education , management
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.