Optimal EOQ Model for Deteriorating Items Considering the Incremental Quantity Discounts and Shortages

In this present paper, a deterministic lot size model is developed for deteriorating items with incremental quantity discounts. It is assumed that shortages are permitted to occur and fully backlogged. A simple solution procedure is shown for determining the optimal order lot size and the optimal order cycle. A numerical example is used to illustrate how the solution procedure works.

Quantity discount contracts for supply chain coordination under asymmetric information and disruptions

The quantity discount contracts are investigated for a one-supplier-one-retailer supply chain with asymmetric information when the retailer's cost is disrupted. While the retailer's cost structure is asymmetric information, two all-unit quantity discount contract models, fixed expected-profit percentage discount(FEPD) and fixed wholesale-pricing percentage discount(FWPD) under asymmetric information are proposed in a regular scenario. When the retailer's cost distribution fluctuates due to disruptions, the optimal emergency strategies of supply chains are obtained under asymmetric information. Using numerical methods, the impact of cost disruptions on decisions about the regular wholesale price, discount wholesale price, order quantity and expected profits of the retailer, the supplier as well as the total system are analyzed. It is found that the FEPD policy is more robust and adaptable than the FWPD policy in disruption circumstances.

Quantity Discount Scheme in Supply Chain under Asymmetric Information

Quantity discount scheme plays an important role in supply chain management. The different quantity discount schemes under symmetric （full） information and asymmetric information, are analyzed by using principal-agent and optimal control theory. As a result, the research reveals that the optimal quantity discount solution under symmetric information is a special case of that under asymmetric information. At the same price, the critical value of quantity discount under asymmetric information is much lower than that under asymmetric information. Therefore, this leads to less cost for retailers and smaller profit for their supplier.

Inventory Games with Quantity Discount

Meca,et al.(2004)studied a class of inventory games which arise when a group of retailers who observe demand for a common good decide to cooperate and make joint orders.In this paper,the authors extend their model to the situation where the manufacturer provides the retailers with a price discount on purchases in excess of a certain order quantity.The authors define the corresponding inventory game with quantity discount,and show that the inventory game has a nonempty core.Then,the authors propose a core allocation rule,the demand-proportionality rule,and characterize it by introducing efficiency,the retailer splitting property and continuity.

Serial Cost Allocation in the Cooperative Purchasing Organization

Under the seller's quantity discount, buyers self-organize or rely on a third party to aggregate their pur- chasing quantities to obtain lower prices. Because of the unequal member contributions in the cooperative pur- chasing organization, the buyers' strategy is diferent, the members often fluctuate, and the organizations do not sustain themselves. An efective mechanism is necessary to improve the performance of purchasing groups. We study the various forms of cost allocation mechanism in practice. Diferent allocation rules may have influence on the buyers' behavior(i.e., purchasing quantities, whether joining the organization or not). We analyze the serial cost allocation and equilibrium purchasing quantity based on a Nash equilibrium, and the results show that each buyer is worse of when not participating in the existence buying organization of the other buyers. We further find that the serial mechanism just confirms the most efcient Nash equilibrium: reasonable cost allocation rule is necessary for the subjects to identify their optimal strategy.