Optimal price and lot size when the supplier offers a temporary price reduction over an interval

Manufacturers and other suppliers offer temporary reduction in the price charged to resellers for a variety of reasons. Typically the trade promotion lasts for some finite time-span. In addition, in reselling situations, the end demand tends to be sensitive to selling price. Thus, when the trade promotion takes place, there is possibility that not all the quantity purchased by the reseller at discount is passed on to the final consumers at a …