Operations and Supply Chain Management Commons^™

A Framework For Understanding The Impacts Of The Everyday Low Purchase Price Policy In A Supply Chain, Yung-Jae Lee

Barowsky School of Business | Faculty Dissertations and Theses

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 …