In this paper, we analyze the impact of supplier pricing schemes and supplier capacity limitations on the optimal sourcing policy for a single firm. We consider the situation where the total quantity to be procured for a single period is known by the firm and communicated to the supplier set. In response to this communication, each supplier quotes a price and a capacity limit in terms of a maxi...

The single-period problem (SPP), also known as the newsboy or newsvendor problem, is to "nd the order quantity which maximizes the expected pro"t in a single-period probabilistic demand framework. Previous extensions to the SPP include, in separate models, the simultaneous determination of the optimal price and quantity when demand is price-dependent, and the determination of the optimal order ...

All-units discounts in retail contracts refer to discounts that lower a retailer’s wholesale price on every unit purchased when the retailer’s purchases equal or exceed some quantity threshold. These discounts pose a challenge to economic theory because it is difficult to understand why a manufacturer ever would charge less for a larger order if its intentions were benign. In this paper, we sho...

In this article, we deal with the problem of determining the economic operating policy when a number of items are to be procured from a number of suppliers offering different quantity discounts schedules. In such inventory problems, a fixed cost is incurred with each replenishment order, independent of the suppliers as well as the items involved in the order. Further, the item involves a minor ...

We consider a two node supply chain with a rational manufacturer–retailer pair, in which the retailer has private information that affects the nodes' reservation levels. Quantity discounts offered by the manufacturer is the mechanism we propose in order to achieve reduced costs for both supply chain nodes. We derive analytical expressions of the quantity discounts that minimize the manufacturer...

We introduce a Generalized Nested Logit model of demand for bundles that can be estimated sequentially and virtually eliminates any challenge dimensionality related to large choice sets. use it investigate quantity discounts carbonated soft drinks by simulating counterfactual with linear pricing. The prices quantities up 1L decrease −31.5% while those larger increase +14.8%. Purchased −20.4%, a...

Certain inventory items are living organisms, for example livestock, and are therefore capable of growing during the replenishment cycle. These items often serve as various saleable food items downstream in supply chains. The purpose of this paper is to develop a lot sizing model for growing items if the supplier of the items offers incremental quantity discounts. A mathematical model is derive...