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|Title:||Price-dependent inventory models with discount offers at random times|
|Authors:||Goh, M. |
Random discount offers
|Citation:||Goh, M.,Sharafali, M. (2002). Price-dependent inventory models with discount offers at random times. Production and Operations Management 11 (2) : 139-156. ScholarBank@NUS Repository.|
|Abstract:||We consider an inventory model with a supplier offering discounts to a reseller at random epochs. The offer is accepted when the inventory position is lower than a threshold level. We compare three different pricing policies in which demand is induced by the reseller's price variation. Policy 1 is the EOQ policy without discount offers. Policy 2 is a uniform price, stock-independent policy. Policy 3 is a stock level-dependent, discriminated price policy. Assuming constant demand rates, expressions are obtained for the optimal order quantities, prices, and profits. The numerical experiments show that if it is better to accept a supplier's discount, then it benefits the reseller to transfer the discount to downstream customers.|
|Source Title:||Production and Operations Management|
|Appears in Collections:||Staff Publications|
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