Early Stop Rule Approach for Teaching All-Unit Quantity Discount Analysis

Abstract

Almost all Supply Chain and Operations Management textbooks cover the topic of quantity discount analysis in an inventory management chapter. However, it is a challenging topic for many undergraduate students since the calculations are somewhat complicated and many students are uncomfortable with any math-related topic. In order to determine whether it is appropriate to take the advantage of the quantity discount, the classical one-step EOQ model is expanded to a multistep procedure, as all relevant textbooks illustrate when explaining the use of quantity discounts. This chapter demonstrates an alternative way to teach students in order to facilitate their understanding the topic more intuitively, and to allow the student to reach the optimal solution faster in most cases. Therefore, it is suggested that the method presented in this chapter may reduce students’ anxiety toward this topic. The simulation results show that with only two discount thresholds, this alternative method can save over 70% of the calculations. It can allow instructors to save time in the classroom and help students solve the problems faster when doing quantity discount problems on homework or exams.

Citation

Wang, Z. (2015), "Early Stop Rule Approach for Teaching All-Unit Quantity Discount Analysis", Applications of Management Science (Applications of Management Science, Vol. 17), Emerald Group Publishing Limited, Bingley, pp. 95-104. https://doi.org/10.1108/S0276-897620140000017006