Faculty Publications

An Algorithm For Selecting Quantity Discounts From Realistic Schedules

Document Type

Article

Keywords

Discontinuities, Modeling, Purchasing, Quantity discounts

Journal/Book/Conference Title

Journal of the Operational Research Society

Volume

41

Issue

2

First Page

165

Last Page

172

Abstract

Consideration of bounds, discontinuities and the integrality of decision variables is often helpful for responding to many practical requirements. Using the case of quantity discounting as an example, it is shown why the above considerations add realism to a model, and how they may be incorporated in the solution procedure. The bounds on the order quantity are fulfilled by establishing suitable stopping rules, while gaps in order quantities are resolved by modifying the input data. As for integrality, a result is established which shows that the feasible points for the integer optimum can be obtained by suitably rounding those for the continuous optimum. A comprehensive algorithm containing these features is proposed, and analytical proofs of the results are included. © 1990, Operational Research Society Ltd.

Department

Department of Management

Original Publication Date

1-1-1990

DOI of published version

10.1057/jors.1990.24

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