AN INVENTORY MODEL WITH PRICE BREAK
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Abstract
In this paper, we discuss a situation in which cost of the item charged is less if the quantity of items purchased is more than a particular quantity. This is generally referred to as quantity discount. Alongwith quantity discount transportation cost has also been taken into consideration explicitly. We assume that the cost of transportation is fixed for a transport mode, say truck, whether it is fully loaded or partially loaded. Transportation cost happens to be a discrete function of the lot-size. For the transportation, cost as given in this paper, which also exists in real world, should be considered along with the inventory cost so as to obtain total minimum cost of transportation and inventory.References
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