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The dynamic lot size model with quantity discount
Author(s) -
Federgruen Awi,
Lee ChungYee
Publication year - 1990
Publication title -
naval research logistics (nrl)
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.665
H-Index - 68
eISSN - 1520-6750
pISSN - 0894-069X
DOI - 10.1002/1520-6750(199010)37:5<707::aid-nav3220370509>3.0.co;2-5
Subject(s) - dynamic programming , time horizon , cost structure , discounting , mathematical optimization , stochastic discount factor , computer science , mathematical economics , mathematics , economics , econometrics , microeconomics , finance , capital asset pricing model
This article treats the dynamic lot size model with quantity discount in purchase price. We study the problem with two different cost structures: the all‐units‐discount cost structure and the incremental‐discount cost structure. We solve the problem under both discount cost structures by dynamic programming algorithms of complexity O(T 3 ) and O(T 2 ) ,respectively, with T the number of periods in the planning horizon.