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ECONOMIC ORDER QUANTITIES WITH QUANTITY DISCOUNTS: GRANDMA DOES IT BEST
Author(s) -
Rubin Paul A.,
Dilts David M.,
Barron Beth A.
Publication year - 1983
Publication title -
decision sciences
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.238
H-Index - 108
eISSN - 1540-5915
pISSN - 0011-7315
DOI - 10.1111/j.1540-5915.1983.tb00185.x
Subject(s) - allegation , order (exchange) , schedule , computer science , sizing , variable (mathematics) , pricing schedule , economic order quantity , mathematical optimization , unit price , operations research , unit (ring theory) , economics , microeconomics , mathematics , econometrics , business , supply chain , marketing , art , mathematical analysis , mathematics education , finance , capital asset pricing model , political science , rational pricing , law , visual arts , operating system
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.