Abstract
It is usual for a seller to offer discounted prices to buyers that procure goods from them in large volumes. A buyer wanting to take advantage of the discount being offered will have to balance the reduced purchase cost with the increase in carrying cost. In this chapter, we discuss continuous review (EOQ) models with quantity discounts, also known as price-break models. We start our discussions describing the concept of discount with a single price-break model. We then extend our discussions to models with multiple price-breaks. Two types of multiple price-break models have been discussed in this chapter:
-
All-units discount model, where the seller offers a uniform discount on all the units purchased. Instantaneous and gradual supply models are both discussed.
-
Incremental discount model, where additional units purchased are offered a higher discount.
Toward the end of this chapter, we also discuss another type of discount model – special discount model, also known as a one-off discount or promotional discount model.
Keywords
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Notes
References
Chopra, S., & Meindl, P. (2010). Supply chain management – Strategy, planning and operation (4th ed.). New Jersey: Pearson Education, Inc.
Gaither, N. (1987). Production and operations management – A problem-solving and decision-making approach (3rd ed.). Chicago: The Dryden Press.
Nahmias, S. (2005). Production and operations analysis (5th ed.). Boston: McGraw-Hill International Edition.
Srinivasan, G. (2010). Quantitative models in operations and supply chain management. New Delhi: PHI Learning Pvt. Ltd.
Vohra, N. D. (2007). Quantitative Techniques in Management (3rd ed.). New Delhi: Tata-McGraw-Hill.
Author information
Authors and Affiliations
Rights and permissions
Copyright information
© 2018 Springer International Publishing AG
About this chapter
Cite this chapter
Shenoy, D., Rosas, R. (2018). Dynamic Inventory Control Models. In: Problems & Solutions in Inventory Management . Springer, Cham. https://doi.org/10.1007/978-3-319-65696-0_4
Download citation
DOI: https://doi.org/10.1007/978-3-319-65696-0_4
Published:
Publisher Name: Springer, Cham
Print ISBN: 978-3-319-65695-3
Online ISBN: 978-3-319-65696-0
eBook Packages: EngineeringEngineering (R0)