A New Approach to Optimize an EPQ Model with Discrete Delivery Orders

The Economic Production Quantity (EPQ) is one of the most applicable models in the production and inventory control environments. Like other classical production and inventory control models, it is derived on the basis of assumptions that limit the real-world applications.Continuous and constant-rate delivery of orders are some of these assumptions. In this paper, we expand this model by assuming that orders may be delivered discretely in the form of multiple pallets. Under these conditions, we formulate the problem as a non-linear integer – programming model, and propose a new approach to solve it. At the end, we present a numerical example to demonstrate the application of the proposed methodology.