Optimal acquisition policy for a supply network with discount schemes and uncertain demands.

Date of Award


Publication Type

Master Thesis

Degree Name



Industrial and Manufacturing Systems Engineering


Engineering, Industrial.



Creative Commons License

Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License.


This study uses a mathematical programming approach in which a series of Mixed Integer Non-Linear Programming (MINLP) models are developed to represent a supply network for a manufacturer dealing with various quantity or volume discount schemes from suppliers, as well as incorporating uncertain product demands that follow Normal distributions. Furthermore, the manufacturer's optimal acquisition policy and production level are obtained simultaneously by solving the models with an objective of maximizing the expected value of the manufacturer's profit. Although complicated by the employment of an integration function, the mathematical models are solved by a GAMS program with integrated SBB, CONOPT, MINOS, and SNOPT solvers working in collaboration. This research is one of the few studies in this field to use commercial optimization software for solving such complex mathematical models. The MINLP models and the GAMS solution program are applied in two real-world cases, and the preliminary results justify the capabilities of both the mathematical models and the GAMS solution program. Numerical analysis supports the managerial implications regarding the acquisition policy, and the comparison between the quantity discount and the volume discount. (Abstract shortened by UMI.)Dept. of Industrial and Manufacturing Systems Engineering. Paper copy at Leddy Library: Theses & Major Papers - Basement, West Bldg. / Call Number: Thesis2006 .M3. Source: Masters Abstracts International, Volume: 45-01, page: 0438. Thesis (M.A.Sc.)--University of Windsor (Canada), 2005.