-

 

 

 




Optimization Online





 

On EOQ Cost Models with Arbitrary Purchase and Transportation Costs

S. Ilker Birbil (sibirbil***at***sabanciuniv.edu)
Kerem Bulbul (bulbul***at***sabanciuniv.edu)
J.B.G. Frenk (frenk***at***sabanciuniv.edu)
H.M. Mulder (hmmulder***at***few.eur.nl)

Abstract: We analyze an economic order quantity cost model with unit out-of-pocket holding costs, unit opportunity costs of holding, fixed ordering costs, and general purchase-transportation costs. We identify the set of purchase-transportation cost functions for which this model is easy to solve and related to solving a one-dimensional convex minimization problem. For the remaining purchase-transportation cost functions, when this problem becomes a global optimization problem, we propose a Lipschitz optimization procedure. In particular, we give an easy procedure which determines an upper bound on the optimal cycle length. Then, using this bound, we apply a well-known technique from global optimization. Also for the class of transportation functions related to full truckload (FTL) and less-than-truckload (LTL) shipments and the well-known carload discount schedule, we specialize these results and give fast and easy algorithms to calculate the optimal lot size and the corresponding optimal order-up-to-level.

Keywords: Inventory; EOQ cost model; transportation cost function; purchasing cost function

Category 1: Applications -- OR and Management Sciences

Citation: Birbil, S.I., Bulbul, K., Frenk, J.B.G., and Mulder, H.M. (2015). On EOQ Cost Models with Arbitrary Purchase and Transportation Costs. Journal of Industrial and Management Optimization, 11(4): 1211-1245.

Download: [PDF]

Entry Submitted: 04/22/2010
Entry Accepted: 04/23/2010
Entry Last Modified: 09/21/2015

Modify/Update this entry


  Visitors Authors More about us Links
  Subscribe, Unsubscribe
Digest Archive
Search, Browse the Repository

 

Submit
Update
Policies
Coordinator's Board
Classification Scheme
Credits
Give us feedback
Optimization Journals, Sites, Societies
Mathematical Optimization Society