Details

Autor(en) / Beteiligte

• Goldengorin, B
• Keane, J
• Kuzmenko, V
• Tso, M K-S

Titel

Optimal supplier choice with discounting

Ist Teil von

• The Journal of the Operational Research Society, 2011-04, Vol.62 (4), p.690-699

Ort / Verlag

London: Taylor & Francis

Erscheinungsjahr

2011

Link zum Volltext

Quelle

SpringerNature Journals

Beschreibungen/Notizen

• This paper investigates a model for pricing the demand for a set of goods when suppliers operate discount schedules based on total business value. We formulate the buyers's decision problem as a mixed binary integer program, which is a generalization of the capacitated facility location problem (CFLP). A branch and bound (BnB) procedure using Lagrangean relaxation and subgradient optimization is developed for solving large-scale problems that can arise when suppliers' discount schedules contain multiple price breaks. Results of computer trials on specially adapted large benchmark instances of the CFLP confirm that a sub-gradient optimization procedure based on Shor and Zhurbenko's r-algorithm, which employs a space dilation in the direction of the difference between two successive subgradients, can be used efficiently for solving the dual problem at any node of the BnB tree.