eprintid: 59
rev_number: 6
eprint_status: archive
userid: 4
dir: disk0/00/00/00/59
datestamp: 2006-04-04
lastmod: 2015-05-29 19:46:24
status_changed: 2009-04-08 16:53:20
type: report
metadata_visibility: show
item_issues_count: 0
creators_name: Ali, M.M.
creators_name: Masinga, L.C.
creators_name: Jekot, T.
creators_id: mali@cam.wits.ac.za
creators_id: londiwe@cam.wits.ac.za
creators_id: tomasz.jekot@supergroup.com
title: Optimal order quantities with volume discounts before and after price increase
ispublished: pub
subjects: food
subjects: retail
studygroups: misgsa1
companyname: CaterPlus
full_text_status: public
abstract: An inventory problem in which annual demand is normally distributed with known means and standard deviations is considered. A purchase price increase is imminent before the next order is placed. Volume discounts are also given in accordance to the size of the order. A model to compute an optimal order quantity and an optimal delivery point is presented. This model can also account for any price change that may occur from time to time.
problem_statement: CaterPlus is a broad line distributor of a comprehensive range of food service products, which serves numerous customers in southern Africa via strategically located, independent business units.

CaterPlus has embarked on a systematic process to determine the geographic extent of its total customer base in southern Africa. Thus far, the process has involved dividing South Africa into clearly demarcated geographic regions. This was done firstly by province, then by municipal district, main-places and lastly sub-place, as defined by Statistics South Africa in the 2001 census. As far as possible a postal code has been allocated to the sub-place. CaterPlus is now planning to divide its entire customer base into these defined regions to assist with the general optimization of its business. This will be done by utilising the postal code provided with the customer delivery address. By doing this, CaterPlus is hoping to define its current customer base to determine the geographic extent of its involvement within the industry.

The initial study embarked upon was the customer base of the Catering Supplies Division, which is South Africa’s leading food service distributor of dry groceries and consumables operating eighteen decentralised business units, run by independent, entrepreneurial management teams operating under various trade names. It is the intention of CaterPlus to expand the study to include the customer base of its Frozen Foods division which operates an additional fourteen strategically located business units.

By embarking on this process CaterPlus has encountered several challenges, as well as opportunities that it would like to investigate including, but not limited to:

    * the optimization of its deliveries from the points of distribution in all the major centres in South Africa, including Johannesburg, Cape Town, Durban, Bloemfontein, Port Elizabeth, East London, George, Pietermaritzburg, Empangeni, Polokwane and Nelspruit
    * the determination of the extent of the clientele shared between its business units
    * the determination of the extent of the market that does not currently form part of its national customer base which will possibly be done by utilizing the VAT numbers of its clientele that it currently has on record at its various business units.

CaterPlus would like correct guidance in this process.
date: 2004
date_type: published
pages: 8
citation:   Ali, M.M. and Masinga, L.C. and Jekot, T.  (2004) Optimal order quantities with volume discounts before and after price increase.  [Study Group Report]     
document_url: http://miis.maths.ox.ac.uk/miis/59/1/dnarep.pdf