We discuss a quantity discount problem between a seller (wholesaler) and a buyer (retailer). The seller purchases products from an upper-leveled supplier (manufacturer) and then sells them to the buyer who faces her/his customers’ demand. The seller attempts to increase her/his profit by controlling the buyer’s order quantity through a quantity discount strategy and the buyer tries to maximize ...

We consider a problem motivated by a central purchasing organization for a major office products distributor. This purchasing organization must source a quantity of a particular resale item from a set of capacitated suppliers. In our case each supplier offers an incremental quantity discount purchase price structure. The purchaser’s objective is to obtain a quantity of a required item at minimu...

Dynamic lot sizing problem is one of the significant problem in industrial units and it has been considered by many researchers. Considering the quantity discount in purchasing cost is one of the important and practical assumptions in the field of inventory control models and it has been less focused in terms of stochastic version of dynamic lot sizing problem. In this paper, stochastic dynamic...

Traditionally, supplier selection should simultaneously take into account numerous heterogeneous criteria, and then is a tedious task for the purchasing decision makers. It becomes especially complicated when quantity discounts are considered at the same time. Under such manner, most studies often formulate such a problem as a Multi-Objective Linear Programming (MOLP) problem, and then scale it...

Because transportation services provided by container lines to forwarders cannot be stored, they can be considered to be newsvendor-type products. This paper discusses a method used to optimize container lines’ freight tariffs in order to maximize their expected profit by considering changes in order quantities made by forwarders responding to the price schemes suggested by the container lines....

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...

Consider a distribution system consisting of a set of retailers facing a single-period price-dependent demand of a single product. By taking advantage of the risk-pooling effect and the quantity/volume discount provided by suppliers or thirdparty carriers, the retailers may place joint orders and keep inventory at central warehouses before demand realization, and allocate inventory among themse...

Supply chains are often in an environment where the demand is affected by the retailer’s sales effort and the supplier has no accurate information about the retailer’s cost. In this situation, the retailer’s action of distorting his cost information could damage the efficiency of the supply chain. In order to reduce the resulted impairment, the problem of how to coordinate the retailer’s action...

The use of price to influence a buyer’s purchasing behavior and thus improve supply chain coordination has received considerable attention. The vendor and buyer are independent economic entities, each maximizing its own profit. We consider the case of a buyer with fixed annual demand, independent of cost. The vendor’s objective is to set a price schedule that encourages the buyer to raise its o...

Multi-site organizations must balance conflicting forces to determine the appropriate degree of purchasing centralization for their respective supplies. The ability to garner quantity discounts represents one of the primary reasons that organizations centralize procurement. This paper provides methodologies to calculate optimal order quantities and compute total purchasing and inventory costs w...