the supplier to the buyer. For the buyer, it results in the reduction of the inventory holding
cost. However, it is often accompanied by an increase in the set up cost for the supplier.
Thus, the supplier may be reluctant to switch to the JIT mode unless he is assured of some
form of compensation. In this paper, we introduce a pricing scheme where the buyer offers
the supplier an increase in the wholesale price, to encourage the supplier to switch to the JIT …