This article treats the dynamic lot size model with quantity discount in purchase price. We study the problem with two different cost structures: the all-units-discount cost structure and the incremental-discount cost structure. We solve the problem under both discount cost structures by dynamic programming algorithms of complexity O(T3) and O(T2), respectively, with T the number of periods in the planning horizon.
Federgruen, Awi, and Chung-Yee Lee. "The dynamic lot size model with quantity discount." Naval Research Logistics 37, no. 5 (1990): 707-713.
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