The Newsboy Problem with Multiple Discounts Offered by Suppliers and Retailers

Abstract

Recent extensions of the newsboy problem have focused on multiple discounts used by retailers to sell excess inventory. Earlier extensions have focused on quantity discounts offered by suppliers. An important practical extension would address a combination of the two previous extensions. In this paper, a newsboy problem with supplier quantity discounts and retailer multiple discounts is formulated and solved. The case of all-units supplier quantity discounts is addressed, and the results with numerical examples are illustrated.