MRP lot sizing with multiple purchase discounts

Abstract

Five MRP lot sizing models are modified to accommodate multiple purchase discounts and tested in an experiment involving different levels of requirements variability, discount attractiveness, and order cost. The testing of multiple purchase discounts is an extension of earlier research that compared MRP lot sizing models under a simplified discount structure involving a single price break [3, 4, 7]. The models tested here have either been implemented in some actual MRP systems or have been proposed as effective models by other researchers. Five hundred test problems were solved by each model, generating 2500 cost figures for comparison. The results indicate that an incremental version of part-period balancing and, to a lesser extent, the least unit cost method are the best models of those tested.