The multi-product newsboy problem with supplier quantity discounts and a budget constraint

Abstract

This paper considers the multi-product newsboy problem with both supplier quantity discounts and a budget constraint, while each feature has been addressed separately in the literature. Different from most previous nonlinear optimization models on the topic, the problem is formulated as a mixed integer nonlinear programming model due to price discounts. A Lagrangian relaxation approach is presented to solve the problem. Computational results on both small and large-scale test instances indicate that the proposed algorithm is extremely effective for the problem. An extension to multiple constraints and preliminary computational results are also reported.