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Replenishment Decisions under Quantity Discounts and Expiry DatesErim ErgeneAn M.S. ThesisSupervisor: Assist. Prof. Dr. Emre BerkAugust 2006In this study, we model a single buyer-single seller system under a quantitydiscount schedule with expiry dates. The buyer faces constant demand and short-ages are not allowed. The seller o¤ers a quantity discount which is e¤ective on thebuyer? next purchase to be exercised by a certain expiry date given that the cur-srent purchase exceeds a minimum quantity. We derive the optimal replenishmentpolicy structure for the buyer which minimizes his/her total cost rate. We obtainthe expressions for the operating characteristics of the buyer and investigate thestructural properties of the objective function. Under a speci…c inventory holdingcost structure, we also investigate the impact of the buyer? decisions on the en-stire buyer-seller inventory system. We conduct an extensive numerical study. Our…ndings show that quantity discount schedules with expiry dates may be bene…cialfor both the buyer and the seller in a variety of operating cost settings.Keywords: Inventory Theory, Quantity Discounts, Discount Expiry Date