title   
  

On EOQ cost models with arbitrary purchase and transportation costs

Birbil, Ş. İlker and Bülbül, Kerem and Frenk, Hans and Mulder, H. M. (2014) On EOQ cost models with arbitrary purchase and transportation costs. (Accepted/In Press)

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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.

Item Type:Article
Uncontrolled Keywords:Inventory; EOQ cost model; transportation cost function; purchasing cost function
Subjects:T Technology > T Technology (General) > T055.4-60.8 Industrial engineering. Management engineering
T Technology > T Technology (General) > T055.4-60.8 Industrial engineering. Management engineering > T57.6-57.97 Operations research. Systems analysis
ID Code:24436
Deposited By:Kerem Bülbül
Deposited On:15 Oct 2014 15:00
Last Modified:01 Oct 2015 16:41

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