Is price‐quantity discount dead in a just‐in‐time environment?

Companies have traditionally relied on taking advantage of price‐quantity discount (PQD) on large purchases. With the adoption of just‐in‐time (JIT) philosophy companies are encouraged to purchase materials in small lots to synchronize production with deliveries. This raised a question whether PQD is applicable in a JIT purchasing environment. Argues that though seemingly inconsistent, JIT and PQD can coexist. Develops an integrated JIT‐PQD model to allow a buyer to decide how much to purchase and how many shipments be placed per order.