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      • Department of Industrial Engineering
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      Analysis and applications of replenishment problems under stepwise transportation costs and generalized wholesale prices

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      Author
      Konur, D.
      Toptal, A.
      Date
      2012
      Source Title
      International Journal of Production Economics
      Print ISSN
      0925-5273
      Volume
      140
      Issue
      1
      Pages
      521 - 529
      Language
      English
      Type
      Article
      Item Usage Stats
      134
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      Abstract
      In this study, we analyze the replenishment decision of a buyer with the objective of maximizing total expected profits. The buyer faces stepwise freight costs in inbound transportation and a hybrid wholesale price schedule given by a combination of all-units discounts with economies and diseconomies of scale. This general cost structure enables the model and the proposed solution to be also used for the supplier selection of a buyer under the single sourcing assumption. We show that the buyers replenishment problem reduces to finding and comparing the solutions of the following two subproblems: (i) a replenishment problem involving wholesale prices given by an all-units discount schedule with economies of scale and a lower bound on the replenishment quantity, and (ii) a replenishment problem involving wholesale prices given by an all-units discount schedule with diseconomies of scale and an upper bound on the replenishment quantity. We propose solution methods for these two subproblems, each of which stands alone as practical problems, and utilize these methods to optimally solve the buyers replenishment problem.
      Keywords
      Cargo capacity
      Newsvendor model
      Premium schedule
      Supplier selection
      Transportation
      Permalink
      http://hdl.handle.net/11693/21279
      Published Version (Please cite this version)
      http://dx.doi.org/10.1016/j.ijpe.2012.07.003
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      • Department of Industrial Engineering 685
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