Revenue Management for Bulk and Spot Customers ◈ For the simple case where the spot market price is known but demand is uncertain, a formula can be used ◈ c B = bulk rate ◈ c S = spot market price ◈ Q* = optimal amount of the asset to be purchased in bulk ◈ p* = probability that the demand for the asset does not exceed Q* ◈ Marginal cost of purchasing another unit in bulk is c B.
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