(An) EOQ model with quantity discounts for purchasing price and freight cost

Abstract

This paper presents an economic analysis of the Economic Order Quantity model for the situation in which both price and freight discounts are available. We consider all unit and incremental discounts systems for the price discounts, and two kinds of freight discount systems, which result in four different cases. For each case, an algorithm is presented which minimizes the related system cost. Numerical examples are solved to show the validity of the algorithms.