Document Type
Master's Thesis
Degree Name
Doctor of Philososphy
Publication Date
1998
Granting Institution
University of California, Irvine
Committee Members
Professor Kut C. (Rick) So Professor Carlton Scott Professor Imran Currim
Abstract
This dissertation studies the effect of implementing everyday low purchase price policy (EDLPP) for a manufacturer in consumer non-durable market. In the framework, many .important retailer and consumer behaviors are considered. A major finding of the study is that temporary price discount (a Hi-Lo policy) is generally unprofitable to the manufacturer because the sales increase due to the discount is usually offset by the decreased profit margin and increased total production and inventory related costs. Another important finding is that the retailer plays a critical role as an active middle agent.
Through the sensitivity analysis, we identified the conditions under which implementation of either a Hi-Lo or an EDLPP policy could make more economic sense. Our analytical framework provides a means to quantify the potential benefits of adopting an EDLPP policy, which would be useful for members in the distribution channel to understand the potential value of the partnership and consequently help to promote a higher level of cooperation.
Rights
Copyright Yung-Jae Lee 1998. All rights reserved.
Included in
Business Administration, Management, and Operations Commons, Business Analytics Commons, Operations and Supply Chain Management Commons