In this paper, we probe the possible effects of a temporary price discount-offered by the supplier on the retailer's replenishment policy with lead time linked to order quantity. The purpose of this study is to develop a decision process for retailer, which allows himlher to adopt whether a special or regular order policy during a emporary sales period. For the case which a special order policy is selected, the optimal special order quantity is determined by maximizing the total cost saving between special and regular orders. In theoretical analysis, we present some useful results to characterize the optimal solutions. Furthermore, an algorithm is established to determine the optimal solutions. Finally, several numerical examples are given to illustrate the theoretical results, and a sensitivity analysis of the optimal solution with respect to the
main parameters is also conducted.
