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Inventory Systems with Transshipments and Quantity Discounts
Noble, Gregory Daniel

2012, Doctor of Philosophy (PhD), Wright State University, Engineering PhD.
This research advances knowledge in the area of inventory systems and the relationship between competing retailers and suppliers of goods. This dissertation studies retailers that face uncertainty in the demand for goods and who purchase the goods from a single supplier. A game theoretic methodology is developed to analyze supplier pricing decisions and retailer quantity decisions and interactions in a competitive transshipment system where quantity discounts are offered. The system studied differs from previous work in the subject by introducing quantity discounts from supplier to retailer into a system of competitive retailers that transship stock. Analysis of these systems focuses on the identification of potential equilibrium actions by the retailers and how the supplier can influence the retailers through its choices. This dissertation identifies new criteria for stability within these systems. Understanding stable relationships is critical to the supplier’s ability to influence the system to achieve coordinated, optimal performance. In a one supplier, two retailer transshipment system, all entities can achieve larger expected profits when the supplier offers the retailer a pricing contract with a two-block tariff quantity discount rather than a standard fixed pricing contract. Additionally, the supplier pricing decisions are examined. This analysis leads to a set of rules for setting the pricing contract parameters that maximize the supplier’s expected profit. Three quantity discount
schemes are examined in the two retailer transshipment system: a two-block tariff, a two-part tariff, and an all-units discount. The two-block tariff discount results in the largest expected profit and greatest flexibility for the supplier. The topic is further researched through the examination of a three retailer system with transshipment and quantity discounts where there is a central retailer. The examination of this system shows the potential value to each entity of one of the retailers entering into a transshipment contract with another retailer.
Frank Ciarallo, Ph.D. (Advisor)
Xinhui Zhang, Ph.D. (Committee Member)
Pratik Parikh, Ph.D. (Committee Member)
James Hamister, Ph.D. (Committee Member)
Steven Harrod, Ph.D. (Committee Member)
231 p.

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Noble, G. (2012). Inventory Systems with Transshipments and Quantity Discounts. (Electronic Thesis or Dissertation). Retrieved from

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Noble, Gregory. "Inventory Systems with Transshipments and Quantity Discounts." Electronic Thesis or Dissertation. Wright State University, 2012. OhioLINK Electronic Theses and Dissertations Center. 28 Nov 2015.

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Noble, Gregory "Inventory Systems with Transshipments and Quantity Discounts." Electronic Thesis or Dissertation. Wright State University, 2012.


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