abstract
- This study introduces a new discount policy in inventory management, called the Discount Order-Frequency Quantity (DOFQ). The proposed framework introduces a behavioral and coordination-oriented inventory incentive mechanism that rewards replenishment regularity instead of encouraging bulk purchasing behavior. Unlike traditional EOQ models that link discounts to order size, timing, or payment method, the DOFQ approach applies discounts based on the frequency of orders placed. The supplier grants a price reduction after a buyer completes a predetermined number of orders, thereby encouraging regular purchasing behavior. A mathematical model is developed to analyze the impact of this policy on total inventory costs. An exact solution method is proposed to determine the optimal order frequency that minimizes total costs. Numerical examples and sensitivity analyses demonstrate the efficiency and practical applicability of the model. The results highlight the benefits of frequency-based discounts for both suppliers and buyers, providing a cost-efficient and sustainable alternative to existing discount policies. This study fills an important gap in EOQ literature and opens avenues for further research on frequency-driven incentives.