As the consumption increase from discounting grows and forward buying becomes a smaller fraction of the demand increase from a promotion, it is more profitable to promote during the peak period. From...

As the consumption increase from discounting grows and forward buying becomes a smaller fraction of the demand increase from a promotion, it is more profitable to promote during the peak period. From Table 9-3, for a sale price of $40, it is optimal to promote in the offpeak month of January, when forward buying is 20 percent and increased consumption is 10 percent. When forward buying is 20 percent and increased consumption is 100 percent, however, it is optimal to promote in the peak month of April.

Table 9-3