T This paper analyzes different pricing strategies in a two-echelon supply chain including one supplier and two retailers. The supplier and the retailers face random yield and random demand, respectively. Moreover, coordination or non-coordination of retailers in receiving the discount is investigated. Game theory is used to model and analyze the problems. The supplier as a leader of Stackelbe...

Quantity discounts are a useful mechanism for coordination. Here we investigate such discounts from the supplier’s perspective, both from a non-cooperative game-theoretical approach and a joint decision model. Taking into account the price elasticity of demand, this analysis aids a sole supplier in establishing an all-unit quantity discount policy in light of the buyer’s best reaction. The Stac...

In this paper, we concentrate on developing a bi-fuzzy multi objective transportation problem (MOSTP) according to bi-fuzzy expected value method (EVM). In a transportation model, the available discount is normally offered on items/criteria, etc., in the form all unit discount (AUD) or incremental quantity discount (IQD) or combination of these two. Here transportation model is considered with ...

We study an integrated quantity discount and vehicle routing problem where truck utilization is increased by building multi-stop routes and increasing order sizes through a purchase incentive. We model the problem and prove it to be NP-hard. Our experiments show that commercial solvers do not effectively solve instances with more than ten buyers. We propose the use of non-compromising route eli...

The use of linear wholesale price contract has long been recognized as a threat to achieving channel effciency. Many formats of nonlinear pricing contract have been proposed to achieve vertical channel coordination. Examples include two-part tariff and quantity discount. A two-part tariff charges the downstream party a fixed fee for participation and a uniform unit price. A quantity discount co...

In this study, the effect of a temporary price discount for a larger order than the regular order offered by the supplier on the retailer’s ordering policy is studied. The demand is assumed to be stock-dependent. The units in inventory deteriorate at a constant rate. This study will help the retailer to take the decision whether to adopt a regular or special order policy. The optimum special qu...

Coordinating activities among members of a distribution channel has been a subject of great attention in the past two decades. Among various methods to coordinate independent channel members, a number of studies in the literature suggest quantity discount as a mechanism to achieve incentive-compatible coordination between a manufacturer and his retailer. The rationale behind this coordination m...

This article develops a dynamic game model of a supply chain consisting of one manufacturer and one retailer to study the coordination mechanism and the effect of demand disruption on the coordination mechanism, where the market demand is sensitive to retail price and service. We assume that the supplier and the retailer only know the distribution of the disrupted amount after the demand disrup...

We discuss a quantity discount problem between a seller (wholesaler) and a buyer (retailer). The seller purchases products from an upper-leveled supplier (manufacturer) and then sells them to the buyer who faces her/his customers’ demand. The seller attempts to increase her/his profit by controlling the buyer’s order quantity through a quantity discount strategy and the buyer tries to maximize ...