Given multiple products with unique lumpy demand patterns, this paper explores the determination of both the lot size for each product and the resource allocation among the products, given an investment budget for production rate improvements. Each product’s optimal production policy takes on only one of two forms: either continuous production or lot-for-lot production. A heuristic procedure de...

This paper deals with the “reverse auction” problem with an assumption sellers are willing to offer quantity discounts to the buyer. The objective of the buyer is to find such an allocation of quantities that one should buy from each seller, in order to pay as little as possible for the given amount of any product. Two algorithms are presented to solve the introduced problem. The first algorith...

With the widespread use of manufacturing philosophies such as Just-In-Time (JIT), emphasis has shifted to the simultaneous consideration of cardinal and ordinal data in supplier selection process. Traditionally, many optimization models of supplier selection assume that the average prices of related expenditures are constant. This is far beyond the real situation. In fact, suppliers usually off...

Estimates from a structural model of consumer behavior and firm conduct are used to decompose the extent to which quantity discounts for paper towels are consistent with second degree price discrimination as opposed to cost differences across sizes. Counterfactual exercises assuming that firms offer only one package size or charge uniform prices across sizes indicate that competition in the mul...

We describe the cost-minimization problem faced by the purchasing department of a multi-plant company when its suppliers offer discounts based simultaneously on plant and on corporate purchases, when discount schedules depend on the total quantity (rather than cost) of ingredients purchased, and when alternative production recipes exist for each final product. We formulate the problem as a nonl...

When a monopolist asks consumers to choose a particular nonlinear tariff option, consumers do not completely know their type. Their valuations of the good and/or optimal quantity purchases are only fully realized after the optional tariff has been subscribed. In order to characterize the menu of optimal nonlinear tariffs when consumers demands are stochastic, I assume that the distributions of ...

In today’s era of supply chain, growing competence among suppliers together with well organized transportation networks making it more versatile and ensures better communication between buyers and suppliers with more cost effective movement of goods in shortest possible times. Suppliers frequently offers discount schedules based on all units model, which divides the range of possible order quan...

Many earlier studies dealing with the two-warehouse inventory model assumed that the direct cost of the product was irrelevant and that production processes are perfect and stationary. However, in the real world, the purchase cost is some function of the quantity purchased and the production processes may deteriorate and thus defective items will occur. This paper, therefore, aims at developing...

Supplier selection in supply chain is a multi-criteria problem that involves a number of quantitative and qualitative factors. This paper deals with a concrete problem of flour purchase by a company that manufactures bakery products and the purchasing price of flour depends on the quantity ordered. The criteria for supplier selection and quantities supplied by individual suppliers are: purchase...

We present an extension to the multi-product newsvendor problem by incorporating the retailer’s pricing decision as well as considering supplier quantity discount. The objective is to maximize the expected profit of the retailer through jointly determining the ordering quantities and selling prices for the products, subject to multiple capacity constraints. We formulate the problem as a General...