Optimizing the economic lot size of a three-stage supply chain with backordering derived without derivatives.
A joint economic lot size model for raw material ordering, manufacturing setup, and finished goods delivering.
1997, Economic lot size
model for price-dependent demand under quantity and freight discounts, International Journal of Production Economics, 48(2), 141-155.
Without the existence of the freight rate anomaly, the economic lot size
for both plant locations would be 505 units per shipment with a resulting total annual purchase cost of $108,995 and $108,965 for plants I (Falls Church, Virginia) and II (Columbus, Ohio), respectively.
Often the rate of deterioration is low for many items and there is scarcely any need to consider the deterioration in the determination of economic lot sizes
With the trend to JIT and trying to get down to economic lot sizes
of one, having to batch parts and move them from one operation to another certainly creates longer lead times.