INVENTORY AND PRICING POLICIES UNDER COMPETITION

We extend the profit maximizing economic order quantity (EOQ) model to the case of a symmetric oligopoly consisting of sellers of a homogeneous product who compete with each other for the same potential buyers. The key feature differentiating this paper from the extant EOQ literature is that, for both uniform pricing and quantity discount pricing cases, the formulations and equilibrium strategies of our models explicitly depend on the number of competing sellers. From the resulting symmetric equilibria, we derive interesting economic implications.