Discount policy with a single price break-point

Abstract

This thesis is concerned with the analysis of the quantity discount pricing schedule under the assumption of a single break-point. The aim is to determine the discount policy in order to increase vendor``s profit. The discount policy without time value of money is proposed for the two types of quantity discount such as all units quantity discount and incremental quantity discount. In particular, discount policy with time value of money is also developed in the all units quantity discount model. We investigate the case in which both the discount rate and the break-point are unknown, and the cases in which either one is prescribed. Numerical examples are also given to illustrate the policy developed.