| dc.description.abstract | Quantity discount strategy is an efficient method for business development in large
companies all over the wolrd, especially those in fast moving consumer goods. The
empirical policy is once applied properly, not only the sales increase, but the profit level
also becomes higher. This paper will focus on pricing strategies of a company whose
products are often classified into families based on their features. A discount policy has
been investigated under Stackelberg game theory model, together with an inverse
process. The model also takes into account the price elasticity of demand so as to
establish a quantity discount policy with the best reaction from the buyer. Moreover, an
extended part in comparison with the key reference is the utility of specific scenarios of
the company. Furthermore, the analysis will include experiments on how the payoffs for
both parties change in cases the costs vary. In addition, the study will examine how
should the company response with customer’s sensitivity of price. On the other hand,
the model will be validated by Mathematica program, which is a effective application
for calculating complicated algorithms. This program is indeed convenient for the nonlinear model of this thesis. The final results will illustrate the optimal percentage of
discount price, time breakpoints and payoffs for both firms. Put another way, if buyer
follow the optimal replenishment schedule, she will receive discount and her reward is
significantly higher, otherwise, she has to purchase products at original price. | en_US |
