The dynamic lot size model with quantity discount: Counterexamples and correction

Federgruen and Lee ([3]) proposed an optimal algorithm for the single-item dynamic lot size model with all-unit discount. In this note we show that their algorithm fails to find the optimal solution for some special cases. We also provide a modification to the algorithm to handle them. © 1998 John Wiley & Sons, Inc. Naval Research Logistics 45: 419–422, 1998