A general framework for economic order quantity models with discounts and transportation costs
Birbil, Ş. İlker and Bülbül, Kerem and Frenk, Hans and Mulder, H. M. (2012) A general framework for economic order quantity models with discounts and transportation costs. (Submitted)
We propose a general framework for economic order quantity type models with unit out-of-pocket holding costs, unit opportunity costs of holding, fixed ordering costs, and general transportation costs. For these models, we analyze the associated optimization problem and derive an easy procedure for determining a bounded interval containing the optimal cycle length. Also for a special class of transportation functions, like the carload discount schedule, we specialize these results and give fast and easy algorithms to calculate the optimal lot size and the corresponding optimal order-up-to-level.
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