An Introduction to Management Science 13th Edition by David Anderson,Dennis Sweeney ,Thomas Williams ,Jeffrey Camm, Kipp Martin

Exercise 26

In the EOQ model with quantity discounts, we stated that if the Q * for a price category is larger than necessary to qualify for the category price, the category cannot be optimal. Use the two discount categories in Problem 21 to show that this statement is true. That is, plot total cost curves for the two categories and show that if the category 2 minimum cost Q is an acceptable solution, we do not have to consider category 1.