Abstract Quantity discounts used as a coordination mechanism to achieve the profitability and cost effective of supply chain has been studied for years, but the discounts of easy-deteriorated items have been paid little attention to. The problem was studied of how a supplier develops an optimal discount pricing structure for easydeteriorated items with price-sensitive demand when the supplier and the buyer make their decisions independently. On the basis of Stackelberg game, a mathematical model was built, in which a supplier acted as the leader by announcing his pricing policy to the buyer in advance and the buyer did as the follower by determining his unit selling price and the sales volume per unit time was determined. It was shown that when the supplier determined the quantity discounts, the supplier and the buyer's profit increased. The sensitivity was analyzed through numerical examples. The results show that quantity discounts increase as the pricesensitive parameter increases and decrease as deterioration rate increase. The profit gained when the supplier and buyer work independently was compared with the profit when they work jointly, showing that the quantity discounts are effective.
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