Abstract
This paper derives the worst-case performance of a power-of-two policy in an all-unit quantity discount model with one price break point, which extends the sensitivity analysis for the classical EOQ model. We show that the worst-case performance will depend on the discount rate α, and is within 7.66% of optimality when α < 7.51%, and approximately within 100α% of optimality when α ⩾ 7.51%.
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