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Dynamic Economic Lot Size Models with Period-Pair-Dependent Backorder and Inventory Costs

Author

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  • Vernon Ning Hsu

    (School of Management, George Mason University, Fairfax, Virginia 22030)

  • Timothy J. Lowe

    (Department of Management Sciences, Henry B. Tippie College of Business, University of Iowa, Iowa City, Iowa 52242)

Abstract

Inventory and backorder cost functions in the classical Wagner-Whitin economic lot size (ELS) models are typically period-pair-independent ( pp-independent ) in the sense that inventoried units carried (or backorders in existence) in a given period are treated the same regardless of the periods in which they are produced (placed) or the periods in which they are used (filled). We consider versions of the problem where inventory and backorder costs are pp-dependent , as well as versions where backorder costs, but not inventory costs, are pp-dependent. Recognizing that the problems considered are NP-hard, we provide cases where the cost structure allows polynomial solvability via dynamic programming.

Suggested Citation

  • Vernon Ning Hsu & Timothy J. Lowe, 2001. "Dynamic Economic Lot Size Models with Period-Pair-Dependent Backorder and Inventory Costs," Operations Research, INFORMS, vol. 49(2), pages 316-321, April.
    • Handle: RePEc:inm:oropre:v:49:y:2001:i:2:p:316-321
    DOI: 10.1287/opre.49.2.316.13534
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    References listed on IDEAS

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    1. Willard I. Zangwill, 1968. "Minimum Concave Cost Flows in Certain Networks," Management Science, INFORMS, vol. 14(7), pages 429-450, March.
    2. Harvey M. Wagner & Thomson M. Whitin, 1958. "Dynamic Version of the Economic Lot Size Model," Management Science, INFORMS, vol. 5(1), pages 89-96, October.
    3. Alok Aggarwal & James K. Park, 1993. "Improved Algorithms for Economic Lot Size Problems," Operations Research, INFORMS, vol. 41(3), pages 549-571, June.
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    Cited by:

    1. Gruson, Matthieu & Cordeau, Jean-François & Jans, Raf, 2018. "The impact of service level constraints in deterministic lot sizing with backlogging," Omega, Elsevier, vol. 79(C), pages 91-103.
    2. Brahimi, Nadjib & Absi, Nabil & Dauzère-Pérès, Stéphane & Nordli, Atle, 2017. "Single-item dynamic lot-sizing problems: An updated survey," European Journal of Operational Research, Elsevier, vol. 263(3), pages 838-863.
    3. Jans, R.F. & Degraeve, Z., 2005. "Modeling Industrial Lot Sizing Problems: A Review," ERIM Report Series Research in Management ERS-2005-049-LIS, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    4. Chand, Suresh & Li, Jian & Xu, Yanyi, 2016. "A periodic review inventory model with two delivery modes, fractional lead-times, and age-and-period-dependent backlogging costs," International Journal of Production Economics, Elsevier, vol. 173(C), pages 199-206.
    5. Z Shen & M Dessouky & F Ordonez, 2011. "Perishable inventory management system with a minimum volume constraint," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 62(12), pages 2063-2082, December.
    6. Vernon Ning Hsu, 2002. "Dynamic Capacity Expansion Problem with Deferred Expansion and Age-Dependent Shortage Cost," Manufacturing & Service Operations Management, INFORMS, vol. 4(1), pages 44-54, June.

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