An EOQ Model with Quantity Discounts and Environmental Objective

In this study, we investigate a retailer\u27s bi-objective Economic Order Quantity (EOQ) model with quantity discounts. The objectives of the model are cost and emission minimizations. We explicitly characterize the Pareto Front of this bi-objective EOQ model when a two-part all-units discounts schedule is offered by the supplier. This characterization considers different cases defined based on the cost-minimizing and emission-minimizing order quantities. Later, numerical examples are used to demonstrate that quantity discounts can decrease costs and emissions of the retailer or can decrease costs while increasing emissions of the retailer. Therefore, we argue that quantity discounts are not necessarily beneficial for the environment. A few future research directions considering the two-echelon setting, with supplier and retailer, are noted