| The purpose of this research is to compare two coordination mechanisms, quantity discount and leadtime-dependent discount, for making inventory decisions within an inter-organizational supply chain. The research utilizes computer simulation as methodology. Data analysis is conducted using advanced multivariate statistical procedures (MANCOVA and MANOVA).;The results of the research showed that both incentive systems can have a positive impact on the profit of the individual members of the supply chain as well as on the throughput of the total chain. The two discount systems help improve the performance of the supply chain through a combination of increased sales and a reduction of key inventory-related costs. Increase in some inventory costs are also expected requiring an analysis of the trade off between the different costs in order to make a better decision.;Given the current condition of the market place, the leadtime-dependent discount system seems to have more potential as a coordination mechanism. The reason being that it can have a better performance with lower inventory levels. In addition, such improvements can be attained using the aid of information technology needed to ensure rapid and accurate transmission of inventory orders. |
