ECONOMIC ORDER QUANTITIES WITH QUANTITY DISCOUNTS: GRANDMA DOES IT BEST

Paul A. Rubin, David Dilts, Beth A. Barron

Research output: Contribution to journalArticle

41 Scopus citations

Abstract

We examine a new algorithm developed by Kuzdrall and Britney [5] for locating the optimal order quantity in the presence of quantity discounts. Their algorithm, based on a model for the supplier's formulation of the price schedule, involves a regression analysis to identify the supplier's variable cost per unit and the fixed cost that the supplier seeks to recover, followed by an iterative search for the optimum. The authors describe this method as a “convenient alternative to the aimless searching of traditional approaches” [5, p. 101]. We examine the allegation of superiority of their total setup lot‐sizing model over the classical method and dispute their claim of superiority.

Original languageEnglish (US)
Pages (from-to)270-281
Number of pages12
JournalDecision Sciences
Volume14
Issue number2
DOIs
Publication statusPublished - 1983
Externally publishedYes

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Keywords

  • Inventory Management
  • Production/Operations Management

ASJC Scopus subject areas

  • Business, Management and Accounting(all)
  • Strategy and Management
  • Information Systems and Management
  • Management of Technology and Innovation

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