Order lot sizing with multiple capacitated suppliers offering leadtime-dependent capacity reservation and unit price discounts

A resource-constrained single product, multi-period and multi-supplier production order lot sizing and supplier selection problem with price discounts is considered. The suppliers offer a menu of price discounts and order sizes (capacity) restrictions that are dependent on the purchaser's desired leadtimes. We formulate the problem as a linear program and present several interesting insights on how the model results could be used by the purchaser and suppliers to optimise their replenishment processes.

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