A note on an economic lot size model for price-dependent demand under quantity and freight discounts

Hung-Chi Chang

International Journal of Production Economics, 2013, vol. 144, issue 1, 175-179

Abstract: In this study, we revisit research contributed by Burwell et al. (1997. International Journal of Production Economics 48, 141–155), where an economic lot size model for price-dependent demand under quantity and freight discounts was proposed. Specifically, for the cases of mixed discounts in which the quantity discounts are either of the incremental or all-units variety and the freight discounts are of the opposite type, we first provide counterexamples to show that adopting the existing algorithm to determine overall optimal lot size and selling price may not achieve the goal of maximizing profit. We then propose an easy to understand computational algorithm to obtain an exact solution.

Keywords: Inventory; Pricing; All-units discounts; Incremental discounts (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:proeco:v:144:y:2013:i:1:p:175-179

DOI: 10.1016/j.ijpe.2013.02.001

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