An integrated JIT-PQD model for enhancing buyer-supplier linkage (revised version)

Price-quantity discount ( PQD) is when suppliers often reduce the unit-purchasing price for large orders to increase their benefits. However, with the adoption of just-in-time ( JIT) philosophy, buyers are encouraged to purchase material in small lots to synchronize production with deliveries. Thus, buyers find it difficult to obtain the benefits from both JIT and PQD simultaneously. This paper proposes an integrated JIT - PQD model for enhancing buyer - supplier linkage in which buyers need not abandon either JIT and PQD but suppliers can increase their benefits. Furthermore, the integrated JIT - PQD model allows resource constraints to be added by the decision-maker as deemed appropriate in real- world situations. To demonstrate the usefulness of the proposed method an illustrative example is included.