On Setup Cost Reduction in the Economic Lot-Sizing Model Without Speculative Motives
Name
OR-256-92.pdf
Size
1.03 MB
Format
Adobe PDF
Checksum (MD5)
2e80c6d28d3f38000ced89be8803be2e
Author(s)
Hoesel, Stan Van
Wagelmans, Albert
Date Issued
August 1991
Publisher
Massachusetts Institute of Technology, Operations Research Center
Series/Report no.
Operations Research Center Working Paper;OR 256-91
Abstract
An important special case of the economic lot-sizing problem is the one in which there are no speculative motives to hold inventory, i.e., the marginal cost of producing one unit in some period plus the cost of holding it until some future period is at least the marginal production cost in the latter period. It is already known that this special case can be solved in linear time. In this paper we study the effects of reducing all setup costs by the same amount. It turns out that the optimal solution changes in a very structured way. This fact will be used to develop faster algorithms for several problems that can be reformulated as parametric lot-sizing problems. One result, worth a sepparate mention, is an algorithm for the so-called dyna-mic lot-.sizing proble-m with learning effects in setups. This algorithm has a complexity that is of the same order as the fastest algorithm known so far, but it is valid for a more general class of models than usually considered. OR/MS subject classification: Analysis of algorithms, computational complexity: parametric economic lot-sizing problem; Dynamic programming /optimal control, applications: parametric economic lot-sizing problem; Inventory/)production, planning horizon: setup cost reduction in economic lot-sizing molel.
MIT Department
Massachusetts Institute of Technology. Operations Research Center
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