| Abstract: | Logistics managers often encounter incremental quantity discounts when choosing the best transportation mode to use. This could occur when there is a choice of road, rail, or water modes to move freight from a set of supply points to various destinations. The selection of mode depends upon the amount to be moved and the costs, both continuous and fixed, associated with each mode. This can be modeled as a transportation problem with a piecewise-linear objective function. In this paper, we present a vertex ranking algorithm to solve the incremental quantity discounted transportation problem. Computational results for various test problems are presented and discussed. |
