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All‐Units Discounts for Standard Container Sizes
Author(s) -
Knowles Thomas W.,
Pantumsinchai Pricha
Publication year - 1988
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.1540-5915.1988.tb00307.x
Subject(s) - economic order quantity , container (type theory) , schedule , knapsack problem , computer science , order (exchange) , mathematical optimization , operations research , scheduling (production processes) , mathematics , economics , business , supply chain , finance , marketing , mechanical engineering , engineering , operating system
Some vendors offer their products to a purchaser in various container sizes. Normally, vendors will offer larger all‐units discounts on larger container sizes. Two algorithms have been developed in this paper to solve for the optimal number of each container size and the order quantity for the deterministic economic order quantity (EOQ) situation. The first algorithm, based in part on the dynamic programming solution to knapsack problems, solves the general case. The second algorithm, based in part on the dominance relations inherent in the pricing schedule, solves the more restricted case in which the purchaser is forced to accept the discount in the following manner. An order must be filled with containers of successively smaller sizes, beginning with the largest size. The purchaser is forced to accept the largest discount first, then the next largest, and so on.