DEVELOPMENT OF AN INTEGRATED DISCOUNTING STRATEGY BASED ON VENDORS’ EXPECTATIONS USING FAHP AND FUZZY GOAL PROGRAMMING

The main goal of a company is to increase its market share and total profits at the same time. However, these two objectives conflict if discount rates are applied to vendors. The objective of this paper is to develop an integrated discounting strategy method to effectively manage the trans­actions...

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Bibliographic Details
Published in:Technological and economic development of economy 2018-03, Vol.24 (2), p.635-652
Main Author: UCAL SARI, Irem
Format: Article
Language:English
Subjects:
Analytic hierarchy process
Discount rates
discounting strategy
fuzzy analytic hierarchy process
fuzzy goal programming
Goal programming
Market shares
Markets
Price wars
revenue management
risk management
Strategy
supply chain management
Transaction processing
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Summary:The main goal of a company is to increase its market share and total profits at the same time. However, these two objectives conflict if discount rates are applied to vendors. The objective of this paper is to develop an integrated discounting strategy method to effectively manage the trans­actions of the vendors by determining the optimum discount rates which balance the increase on the market share and the total profit. With the proposed methodology which utilizes fuzzy analytic hierarchy process and fuzzy goal programming, determination of the discount rates of each vendor under different discounting strategies is facilitated. This enables the vendors to choose the most suitable discounting strategy with the best applicable discount rate and enables the managers to predict the transactions of the vendors. The proposed method is validated with a numerical study conducted on a pilot region of an international company.
ISSN:2029-4913
2029-4921
DOI:10.3846/20294913.2016.1213205