Quantity Discounted Inventory Replenishments With Limited Storage Space

Abstract

The presence of quantity discounts, in general, increases the order quantities (lot size). Other factors such as limited space or limited cash, however, restrict the degree to which the lot sizes can be increased. In this paper we investigate a heuristic procedure to allocate the limited resources to the products so as best to exploit the discounting structure and the costs of storage and ordering. The heuristic procedure has been demonstrated to be computationally very effective and within 0,9% of the optimum solution in sample tests.

Résumé

L’existence de rabais sur le volume augmente, de manière générale, les quantities de la conimande (tailie du lot). Cependant d’autres facteurs tels que l’espace de stockage limité, ou des liquidités reduites, restreignent le degré d’augmentation des tailles de lots, Dans cet article on examine une heuristique qui a pour objectif d’allower les ressources limitées aux produits de façon à exploiter au mieux la structure de rabais et les coûts de stockage et commande, Sur la base des echantillons étudiés on a démontré que l’heuristique est de résolution efficace et permet d’obtenir des resultats se situant à 0,9% de la solution optimale.

Additional information

Notes on contributors

Amiya Chakravarty

AMIYA K. CHAKRAVARTY received his M SC and Ph D in operations research/operations management from the London School of Economics. He has published extensively in such journals as the International Journal of Production Research, Management Science, Operations Research, HE Transactions, and the Journal of Operational Research Society. Professor Chakravarty’s research interests are in production and inventory management. He had done extensive research in the areas of multiproduct inventor;^ coordination, group discounts, multi-echelon inventory systems, group technology, mixed model line balancing, investment in multi-stage production systems, quality control in multistage systems, and optimal hierarchical system design. His current research focuses on the planning and control of flexible manufacturing systems using robots and decision support systems.