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Determining Optimal Selling Price and Lot Size When the Supplier Offers All‐Unit Quantity Discounts *
Author(s) -
Abad Prakash L.
Publication year - 1988
Publication title -
decision sciences
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.238
H-Index - 108
eISSN - 1540-5915
pISSN - 0011-7315
DOI - 10.1111/j.1540-5915.1988.tb00290.x
Subject(s) - purchasing , price elasticity of demand , product (mathematics) , demand curve , unit price , constant (computer programming) , microeconomics , function (biology) , unit (ring theory) , complementary good , economics , computer science , mathematics , operations management , geometry , mathematics education , evolutionary biology , programming language , biology
This paper is concerned with finding the optimal price and lot size for a retailer purchasing a product for which the supplier offers all‐unit quantity discounts. Demand for the product is assumed to be a decreasing function of price, and a procedure is developed for finding the optimal price and lot size for a class of demand functions. The procedure then is applied to two common demand functions: (1) the constant price‐elasticity function, and (2) the linear demand function.