Journal article
On ''A Quantity Discount Pricing Model to Increase Vendor Profits'
Management science, Vol.32(11), pp.1513-1517
01 Nov 1986
Abstract
In 1984, Monahan published a study in which he developed a model for establishing an optimal quantity discount schedule from the viewpoint of the seller. It is argued that Monahan's model is limited to cases in which the seller purchases from another supplier and incurs negligible or no inventory carrying costs. Two additional parameters are defined and introduced as a method of developing a generalized version of Monahan's model: 1. the production rate in units per year, and 2. the seller's manufacturing cost excluding order processing, manufacturing set up, and inventory carrying costs. It is argued that, when the seller's inventory carrying costs are incorporated, the Monahan model is equivalent to a joint economic lot size approach developed by Banerjee (1986). It is suggested that the modified Monahan model would be useful under many circumstances, even with the lot-by-lot assumption.
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Details
- Title
- On ''A Quantity Discount Pricing Model to Increase Vendor Profits'
- Creators
- Avijit Banerjee
- Publication Details
- Management science, Vol.32(11), pp.1513-1517
- Publisher
- Institute for Operations Research and the Management Sciences
- Resource Type
- Journal article
- Language
- English
- Academic Unit
- Decision Sciences (and Management Information Systems); Bennett S. LeBow College of Business; Drexel University
- Identifiers
- 991019551790704721