Comment—Managing Channel Profits: Comment

In a recent paper in this journal, Jeuland and Shugan (Jeuland, A., S. Shugan. 1983. Managing channel profits. Marketing Sci. 2 (Summer) 239–272.) proposed a quantity discount schedule as a way of coordinating a channel. As they put it on p. 253 of their paper, “a quantity discount schedule which would fix the retailer's and hence the manufacturer's profits to some fixed linear function of total channel profits would lead the channel to maximize profits.” The purpose of this note is to show that a quantity discount schedule is not necessary for channel coordination.