TRANSPORTATION TYPE PROBLEMS WITH QUANTITY DISCOUNTS

The per unit transportation cost from a specific supply source to a given demand sink is dependent on the quantity shipped, so that there exist finite intervals for quantities where price breaks are offered to customers. Thus, such a quantity discount results in a nonconvex, piecewise linear functional. In this paper, an algorithm is provided to solve this problem. This algorithm, with minor modifications, is shown to encompass the "incremental" quantity discount and the "fixed charge" transportation problems as well. It is based upon a branch-and-bound solution procedure. The branches lead to ordinary transportation problems, the results of which are obtained by utilizing the "cost operator" for one branch and "rim operator" for another branch. Suitable illustrations and extensions are also provided.

• Corporate Authors:

  Office of Naval Research

  Department of the Navy, 800 North Quincy Street
  Arlington, VA  United States  22217
• Authors:
  • Balachandran, V
  • PERRY, A
• Publication Date: 1976-6

Media Info

• Features: References;
• Pagination: p. 195-209
• Serial:
  • Naval Research Logistics Quarterly
  • Volume: 23
  • Issue Number: 2
  • Publisher: Department of the Navy

Subject/Index Terms

• TRT Terms: Algorithms; Branch and bound algorithms; Costs; Demand; Discount; Economics; Freight traffic; Freight transportation; Industrial economics; Linear programming; Logistics; Marketing; Rates; Supply; Transportation; Warehouses
• Uncontrolled Terms: Freight rates; Quantities; Supply and demand
• Old TRIS Terms: Mathematical programming, linear
• Subject Areas: Economics; Society; Transportation (General);

Filing Info

• Accession Number: 00157247
• Record Type: Publication
• Source Agency: Engineering Index
• Files: TRIS
• Created Date: Aug 4 1977 12:00AM