Abstract
In business replenishment, discount offers of multi-item may either provide different discount schedules with a single discount type, or provide schedules with multiple discount types. The paper investigates the joint effects of multiple discount schemes on the decisions of multi-item joint replenishment. In this paper, a joint replenishment problem (JRP) model, considering three discount (all-unit discount, incremental discount, total volume discount) offers simultaneously, is constructed to determine the basic cycle time and joint replenishment frequencies of multi-item. To solve the proposed problem, a heuristic algorithm is proposed to find the optimal solutions and the corresponding total cost of the JRP model. Numerical experiment is performed to test the algorithm and the computational results of JRPs under different discount combinations show different significance in the replenishment cost reduction.
Highlights
In the multi-item inventory environment, a joint replenishment policy can generally be defined as the coordination of multiple items that may be ordered jointly from a single supplier [1,2,3]
In the total business volume discount scheme, supplier offers discount rate according to the total business value of the ordered items, but not to the ordering quantities, and the discount rate breaks are a function of total business volume discount
We provide a new focus on joint replenishment problem (JRP) with multiple discount schemes
Summary
In the multi-item inventory environment, a joint replenishment policy can generally be defined as the coordination of multiple items that may be ordered jointly from a single supplier [1,2,3]. A performed joint replenishment policy with conventional JRP assumptions increases the inventory level and the system cost of the buyer for controlling inventory [2] While in another aspect, in order to promote the buyer to purchase more items, the supplier usually provides the buyer discount offers to balance the buyers’ inventory level and the inventory carrying cost. A supplier can provide more flexible discount offers in light of particular types of different items. Within this background, the new model is constructed to investigate the joint effects of different discount combinations to the total cost of JRP.
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