Rajeev Kohli

Coordinating Buyer-Seller Transactions Across Multiple Products

Coauthor(s): Heungsoo Park.

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Abstract:
Joint ordering policies are examined as a method for reducing the transactions costs for multiple products sold by a seller to a homogeneous group of buyers. The problem of determining efficient joint ordering policies has the same structure as the previously-examined problem of determining the efficient ordering policy for a single product. Efifcient lot-sizes are independent of prices, and are supported by a range of average unit prices that permit every possible allocation of the transactions cost savings between the buyer and the seller. Product bundling supports efficient joint orders across products, just as a quantity discount supports efficient transactions for a single product.

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