Abstract

Abstract This article describes the operation and performance of a company supplied ordering policy used in the multiple purchase discounts framework when the discount is for all units purchased. The ordering policy is used to order raw materials and purchased components within the material requirements planning environment, and was incorporated into a simulation model which used real product discount structures to generate cost data. The model also considered the condition of multiple purchase discounts and demand uncertainty. This simple company ordering policy, while not the best performer, did surprisingly well in this environment as demonstrated by the supporting evidence from the simulation.

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