Designing a quantity discount scheme for a newsvendor-type product with numerous heterogeneous retailers

@article{Lau2007DesigningAQ,
  title={Designing a quantity discount scheme for a newsvendor-type product with numerous heterogeneous retailers},
  author={Amy Hing Ling Lau and Hon-Shiang Lau and Jian-Cai Wang},
  journal={European Journal of Operational Research},
  year={2007},
  volume={180},
  pages={585-600}
}
This paper presents a practical approach for designing a quantity-discount (‘‘qd’’) scheme for a manufacturer who supplies a newsvendor-type product to a large number of heterogeneous retailers. The main components of our approach are: (i) an information structure for handling a large number of heterogeneous retailers with changing identities; and (ii) expected-profit expressions for any given qd scheme. We show that these expected-profit expressions can be easily optimized to produce… CONTINUE READING