Joint replenishment inventory model under quantity discount: an integer linear programming approach

This work aims at investigating the relevance of joint replenishment inventory model under quantity discount environment in a real-life business case. Along the dissertation, we propose three inventory system simulations under Excel. The two first, namely the EOQ and the modified EOQ models, are designed to be compared to the last one based on a joint replenishment model. This latter system calls for an integer linear programming problem solved under the software LINGO. The project draws some conclusions around the overall performance and findings of joint replenishment inventory model against the two other simulations. Average inventory level, total relevant costs and service level are particularly discussed as key performance measures. The dissertation starts with a brief introduction to the problem in chapter 1. Then, chapter 2 is dedicated to a deep review of the literature. Inventory management concepts are discussed and specific attention is paid to joint replenishment and quantity discount theories. Afterwards, chapter 3 explains all the methodology employed to address the problem. In other words, we provide a full explanation of how to run the simulations and the linear programming approach. Finally, chapter 4 discusses the key results of this work when chapter 5 concludes it