Fixed cycle ordering policies for capacitated multiple item inventory systems with quantity discounts

We consider the problem of stocking inventories of multiple items that share a common resource, like a warehouse space, where the vendor of the items offers quantity discounts. For the classic version of this problem without quantity discounts, it is well known that a fixed cycle approach, where the time between order replenishments for all items is the same, is a cost effective heuristic solution methodology, one that in some instances is preferred to both independent cycle and non-stationary approaches. In this paper, we demonstrate that a fixed cycle approach can also be used to heuristically solve the quantity discount case. Computational results suggest that this approach is often more cost effective than competing solution methodologies, particularly when the resource constraint is tight.