Pricing Policies for Quantity Discounts

1 October 1987

journal article
Published by Institute for Operations Research and the Management Sciences (INFORMS) in Management Science

Vol. 33 (10) , 1247-1252
https://doi.org/10.1287/mnsc.33.10.1247

Abstract

In this paper we analyze the seller's decision to offer quantity discounts to the buyer. We build on an existing model as follows. We first characterize the range of order sizes and prices which reduce costs for the buyer and seller, and develop related pricing schemes. The model is then extended to allow inventory carrying costs to be a function of price.

Keywords

BUILD
QUANTITY DISCOUNTS
MODEL
FUNCTION
ORDER SIZES
INVENTORY CARRYING
PRICING POLICIES
OFFER QUANTITY
ALLOW INVENTORY

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