Dynamic Procurement, Quantity Discounts, and Supply Chain Efficiency

  • Feryal Erhun
  • Pinar Keskinocak
  • Sridhar Tayur
Part of the International Handbooks on Information Systems book series (INFOSYS)


We study a model with a single supplier and a single buyer who interact multiple times before the buyer sells her product in the end-consumer market. We show that when the supplier uses a wholesale price contract, even under perfect foresight, the supplier, the buyer, and the end-consumers benefit from multiple trading opportunities versus a one-shot procurement agreement.


Advance capacity procurement Incremental quantity discounts Strategic interactions Supply chain coordination 



The first author was partially supported by NSF Award DMI-0400345 and the second author was supported by NSF Career Award DMII-0093844. The authors would like to express their deepest gratitude to two anonymous reviewers for their constructive comments and suggestions.


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Copyright information

© Springer-Verlag Berlin Heidelberg 2011

Authors and Affiliations

  1. 1.Department of Management Science and EngineeringStanford UniversityStanfordUSA
  2. 2.School of Industrial and Systems EngineeringGeorgia Institute of TechnologyAtlantaUSA
  3. 3.Tepper School of BusinessCarnegie Mellon UniversityPittsburghUSA

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