| dc.description.abstract | Quantity discount strategy is one of the most practical method for business
development in almost companies or organization. The useful strategy helps the business
increase sales, attract more customers and result in earning higher profit level.
This paper will concentrate on business development strategies of Innisfree
cosmetic company. A realistic discount policy has been investigated under Stackelberg
game theory model, which an inverse process will be applied. The model also takes into
account the price elasticity of demand so as to establish an all-unit quantity discount policy
with the best reaction of buyer. Moreover, an extended part in comparison with the key
reference is the utility of specific scenarios of Innisfree company. Furthermore, the analysis
will also concentrate on how the company deal with the problem of different product’s price
elasticities of demand. In other words, the study will examine what is company’s reaction
with the fluctuation of customer’s sensitivity of price.
On the other hand, the model will be validated under Mathematica program, which
is an easy, helpful and practical application for calculating complicated algorithms. This
program actually convenient for the non-linear model of this thesis.
The final result will illustrate the optimal percentage of discount price as well as a
quantity breakpoint where decide whether the discount is applied. Put another way, if buyer
order quantity is equal or greater than the breakpoint, her price for purchasing is decrease
by a specific rate, otherwise, she has to purchase products at original price. | en_US |
