While most market-oriented pricing schemes include offers of quantity discounts, their size is generally decided on arbitrarily. This article discusses the various possible marketing objectives of quantity discounts and argues that valid methods for calculating appropriate schedules should be linked to these objectives. Using a specific case study, the practical application of this approach is ...

Previous studies in the issue of inventory models with imperfect quality assumed the defectives could be sold in a batch by the end of the inspection process and the manufacturing systems were push systems. However, the above assumptions may not be true in the pull system in which buyer is powerful. Therefore, in this paper, we develop a new inventory model for items with imperfect quality and ...

Quantity discount pricing is a common practice used by business-to-business and business-toconsumer companies. A key characteristic of quantity discount pricing is that the marginal price declines with higher purchase quantities. In this paper, we propose a choice-based conjoint model for estimating consumer-level willingness-to-pay (WTP) for varying quantities of a product and for designing op...

The Postal Accountability and Enhancement Act of 2006 (PAEA) fundamentally altered the U.S. Postal Service by introducing enhanced pricing flexibility, profit incentives, and potential antitrust liability. PAEA also mandated a change from breakeven, cost-of-service regulation where revenues must equal costs over time to price cap regulation. The Postal Service can now introduce new or modify ex...

Abstract: We consider a dynamic pricing problem for a monopolistic company selling a perishable product when customer demand is uncertain and occurs in batches which must be fulfilled as a whole. The seller can price-discriminate between the batches of different size by setting different unit prices. The problem is modeled as a stochastic optimal control problem to find an inventory-contingent ...

In the supply-chain literature, an increasing body of work studies how suppliers can use incentive schemes such as quantity discounts to influence buyers’ ordering behaviour, thus reducing the supplier’s (and the total supply chain’s) costs. Various functional forms for such incentive schemes have been proposed, but a critical assumption always made is that the supplier has full information abo...

This study examined the incidence and determinants of quantity price discounts and quantity price surcharges in the German food sector through a bivariate probit, using recent consumer scanner survey data. Selectivity bias was corrected for in estimating the degree of quantity price surcharge and quantity price discount, using Heckman’s procedure. The findings reveal that almost 10% of the inve...