Big Chemical Encyclopedia

Chemical substances, components, reactions, process design ...

Articles Figures Tables About

Advance order discounts under competition

Manufacturers often offer advance order discounts to attraa retailers. Consider a supply chain where two retailers offer produas to their separate customer bases. As is the practice in many industries, suppose one of these retailers offers a price discount for those who place orders in advance of the season. This discount may attract a portion of the demand from both retailers, depending on the relative size of the discounts offered by each retailer as well as the fraction of the customer base that will be sensitive to such early demand placement. Note that all deliveries take place during the season. This section provides a short summary of the model (details are in the paper [67]) and a numerical example. [Pg.64]

While their in-season demand levels are correlated, both retailers have to order inventory in advance in the start of the season and thus face their own independent single-period demand uncertainty models (newsboy models). Let Xj and X2 refer to the discount factor for early orders, thus the retail prices are (for Retailer 1) andpX2 (for Retailer 2) for early orders. [Pg.64]

As an example, consider Retailers 1 and 2, whose joint demand has the distribution in Table 3.7. [Pg.64]

Note that in the absence of any advance orders. Retailer 1 faces a demand of 4 with probability 0.5 and 12 with probability 0.5. Similarly, [Pg.64]


See other pages where Advance order discounts under competition is mentioned: [Pg.64]    [Pg.64]   
See also in sourсe #XX -- [ Pg.64 , Pg.65 , Pg.66 ]




SEARCH



Discounting

Discounts

Discounts/discounting

© 2024 chempedia.info