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Article: Quantity discount and handling-charge reduction schemes for a manufacturer supplying numerous heterogeneous retailers

TitleQuantity discount and handling-charge reduction schemes for a manufacturer supplying numerous heterogeneous retailers
Authors
KeywordsHandling-charge reduction
Order incentives
Quantity discount
Supply chain contracts
Issue Date2008
PublisherElsevier BV. The Journal's web site is located at http://www.elsevier.com/locate/ijpe
Citation
International Journal Of Production Economics, 2008, v. 113 n. 1, p. 425-445 How to Cite?
AbstractA "manufacturer" supplies a "staple" product to a large number of "retailers" having very different sales volumes. Many models have considered how the "manufacturer" should design a quantity-discount (QD) scheme to induce the retailers to order in larger batch sizes. Our models differ from most existing ones in three aspects. First, we consider situations with a much larger number of retailers. Second, our manufacturer does not need to coordinate her replenishment cycles with those of the retailers. Third, besides "QD" schemes, we also consider "handling-charge reduction" ("HCR") schemes (i.e., a retailer pays a lower handling charge if his order is sufficiently large). We develop models and solution procedures for designing QD and HCR schemes that maximize the manufacturer's expected gain. We consider schemes with one as well as two "price breaks" (i.e., order size(s) needed to qualify for a QD or HCR). Examples of noteworthy characteristics revealed by our analytical and numerical analyses are (i) an optimal QD scheme will have a high enough price break such that extremely few retailers will be big enough to get a "free" discount and (ii) an optimal HCR scheme produces practically the same magnitude of expected total gains as an optimal QD scheme. © 2007 Elsevier B.V. All rights reserved.
Persistent Identifierhttp://hdl.handle.net/10722/85931
ISSN
2015 Impact Factor: 2.782
2015 SCImago Journal Rankings: 2.749
ISI Accession Number ID
References

 

DC FieldValueLanguage
dc.contributor.authorLau, AHLen_HK
dc.contributor.authorLau, HSen_HK
dc.contributor.authorZhou, YWen_HK
dc.date.accessioned2010-09-06T09:10:53Z-
dc.date.available2010-09-06T09:10:53Z-
dc.date.issued2008en_HK
dc.identifier.citationInternational Journal Of Production Economics, 2008, v. 113 n. 1, p. 425-445en_HK
dc.identifier.issn0925-5273en_HK
dc.identifier.urihttp://hdl.handle.net/10722/85931-
dc.description.abstractA "manufacturer" supplies a "staple" product to a large number of "retailers" having very different sales volumes. Many models have considered how the "manufacturer" should design a quantity-discount (QD) scheme to induce the retailers to order in larger batch sizes. Our models differ from most existing ones in three aspects. First, we consider situations with a much larger number of retailers. Second, our manufacturer does not need to coordinate her replenishment cycles with those of the retailers. Third, besides "QD" schemes, we also consider "handling-charge reduction" ("HCR") schemes (i.e., a retailer pays a lower handling charge if his order is sufficiently large). We develop models and solution procedures for designing QD and HCR schemes that maximize the manufacturer's expected gain. We consider schemes with one as well as two "price breaks" (i.e., order size(s) needed to qualify for a QD or HCR). Examples of noteworthy characteristics revealed by our analytical and numerical analyses are (i) an optimal QD scheme will have a high enough price break such that extremely few retailers will be big enough to get a "free" discount and (ii) an optimal HCR scheme produces practically the same magnitude of expected total gains as an optimal QD scheme. © 2007 Elsevier B.V. All rights reserved.en_HK
dc.languageengen_HK
dc.publisherElsevier BV. The Journal's web site is located at http://www.elsevier.com/locate/ijpeen_HK
dc.relation.ispartofInternational Journal of Production Economicsen_HK
dc.subjectHandling-charge reductionen_HK
dc.subjectOrder incentivesen_HK
dc.subjectQuantity discounten_HK
dc.subjectSupply chain contractsen_HK
dc.titleQuantity discount and handling-charge reduction schemes for a manufacturer supplying numerous heterogeneous retailersen_HK
dc.typeArticleen_HK
dc.identifier.emailLau, AHL: ahlau@business.hku.hken_HK
dc.identifier.authorityLau, AHL=rp01072en_HK
dc.description.naturelink_to_subscribed_fulltext-
dc.identifier.doi10.1016/j.ijpe.2007.10.003en_HK
dc.identifier.scopuseid_2-s2.0-41549138864en_HK
dc.identifier.hkuros143804en_HK
dc.identifier.hkuros153238-
dc.identifier.hkuros166499-
dc.relation.referenceshttp://www.scopus.com/mlt/select.url?eid=2-s2.0-41549138864&selection=ref&src=s&origin=recordpageen_HK
dc.identifier.volume113en_HK
dc.identifier.issue1en_HK
dc.identifier.spage425en_HK
dc.identifier.epage445en_HK
dc.identifier.isiWOS:000255583000032-
dc.publisher.placeNetherlandsen_HK
dc.identifier.scopusauthoridLau, AHL=7202626080en_HK
dc.identifier.scopusauthoridLau, HS=7201497264en_HK
dc.identifier.scopusauthoridZhou, YW=7405366443en_HK

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