The Role of Quantity Discounts in the Presence of Heterogeneous Buyers

Z. Kevin Weng () and Amy Zeng ()

Annals of Operations Research, 2001, vol. 107, issue 1, 369-383

Abstract: In this paper we develop a model to examine the role of quantity discounts in synchronizing production and order cycles for a system consisting of one manufacturer and two heterogeneous buyers. The model developed can serve as a guideline for the manufacturer and the buyers as how to integrate their decisions to achieve higher benefits. The numerical examples indicate that the benefit of synchronization decreases with the degree of heterogeneity of the buyers. The conditions under which it is profitable for the manufacturer to synchronize with the heterogeneous buyers are demonstrated through numerical examples. Copyright Kluwer Academic Publishers 2001

Keywords: distribution; inventory; supply chain management; synchronization (search for similar items in EconPapers)
Date: 2001
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DOI: 10.1023/A:1014979822085

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