Analysis of the Uncapacitated Dynamic Lot Size Problem

Abstract

In this paper we provide worst case error bounds for several heuristics for the uncapacitated dynamic lot size problem. We propose two managerially oriented procedures and show that they have a relative worst case error bound equal to two, and develop similar analyses for methods known as the "Silver and Meal" heuristics, the part period balancing heuristics, and economic order quantity heuristics (expressed in terms of a time supply of demand).We also present results on aggregation and partitioning of the planning horizon.