Analysis of Quantity Discount Model from both Seller's and Buyer's Point-of-View

Lesmana, Setiadi (2003) Analysis of Quantity Discount Model from both Seller's and Buyer's Point-of-View. In: Proceedings 2nd National Industrial Engineering Conference. Industrial Engineering in a competitive and borderless world : Success through Business system integration, 9-11 Oktober 2003, University of Surabaya.

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Quantity discounts have long been used in many industries and trading companies. Most of traditional inventory management models, especially quantity discount models, analyze the inventory systems solely from one perspective, the buyer's point of view. This paper presents a review of some analytical approaches about how to design the terms of a vendor (seller or supplier) oriented. If develops the terms of on "optimal" quantity discount pricing schedule, to be used by the seller to obtain larger orders quantity from the buyer or major customer. The discount schedules are determined by a mathematical model which anticipates the buyer's likely reaction to any vendor proposal. The ultimate schedule is one which maximizes the supplier's resultant economic gains, but does so at absolutely no added cost to the buyer. Another alternative called the rational-lot-size production policy is also presented in this paper. The rational lot-size production policy can be considered and compared with the quantity discount policy in order to maximize the yearly net profit. Finally, a numerical example validates the models

Item Type: Conference or Workshop Item (Paper)
Uncontrolled Keywords: inventory/production policies, inventory deterministic models, quantity discount.
Subjects: H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
Divisions: Faculty of Engineering > Department of Industrial Engineering
Depositing User: Eko Setiawan 194014
Date Deposited: 16 Mar 2012 07:17
Last Modified: 17 Feb 2014 05:09

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