Abstract
This paper develops a model of an ordering policy of raw materials with a price-quantity discount rate in a fixed production batch size. An optimal multi-order policy for raw materials procurement in a single production batch is proposed to minimize the total cost. A heuristic method is also addressed to find the optimal solution when both ordering number of raw materials and number of finished products shipment are integers. The results of numerical examples indicate that the final optimal solutions should be discussed in all situations which ordering quantity is above, equal to, and below the maximum quantity of discount.
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