On EOQ cost models with arbitrary purchase and transportation costs

Ilker Birbil, K Bulbul, JBG (Hans) Frenk, Martyn Mulder

Research output: Contribution to journalArticleAcademicpeer-review

11 Citations (Scopus)

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 purchasetransportation 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. On EOQ Cost Models with Arbitrary Purchase and Transportation Costs (PDF Download Available). Available from: https://www.researchgate.net/publication/265601733_On_EOQ_Cost_Models_with_Arbitrary_Purchase_and_Transportation_Costs [accessed Mar 4, 2016].
Original languageEnglish
Pages (from-to)1211-1245
Number of pages35
JournalJournal of Industrial and Management Optimization
Volume11
Issue number4
DOIs
Publication statusPublished - 2015

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