Optimization of Lot-Size for Dynamic Order with Quantity Discount

To optimize the lot-sizes for dynamic orders with quantity discounts offered by vendors, a non- linear mixed integer programming model was proposed. In the model, multi-products, multi-discounts and capacities constraints of the purchaser and vendors were taken into account. The model was resolved with heuristic algorithm based on Tabu search technique. The computational results of an example validate the effectiveness of the model and the algorithm.