On EOQ cost models with arbitrary purchase and transportation costs

Abstract

We analyze an economic order quantity cost model with unit out-of-pocket holding costs, unit opportunity costs of holding, fixed ordering costs, and general purchase-transportation costs. We identify the set of purchase-transportation cost functions for which this model is easy to solve and related to solving a one-dimensional convex minimization problem. For the remaining purchase-transportation cost functions, when this problem becomes a global optimization problem, we propose a Lipschitz optimization procedure. In particular, we give an easy procedure which determines an upper bound on the optimal cycle length. Then, using this bound, we apply a well-known technique from global optimization. Also for the class of transportation functions related to full truckload (FTL) and less-than-truckload (LTL) shipments and the well-known 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.

Available Versions of this Item

• On the economic order quantity model with transportation costs. (deposited 30 Nov 2009 20:49)
  • A general framework for economic order quantity models with discounts and transportation costs. (deposited 27 Sep 2012 23:24)
    • On EOQ cost models with arbitrary purchase and transportation costs. (deposited 15 Jan 2014 20:48)
      • On EOQ cost models with arbitrary purchase and transportation costs. (deposited 15 Oct 2014 15:00) [Currently Displayed]
        • On EOQ cost models with arbitrary purchase and transportation costs. (deposited 01 Oct 2015 16:41)