Awi Federgruen

The dynamic lot size model with quantity discount

Coauthor(s): Chung-Yee Lee.

Abstract:
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(T³) and O(T²), respectively, with T the number of periods in the planning horizon.

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