Single Item Lot Sizing Problem for a Warm/Cold Process with Immediate Lost Sales
Toy, A. O.
European Journal of Operational Research
Berk, E., Toy, A. Ö., & Hazır, Ö. (2008). Single item lot-sizing problem for a warm/cold process with immediate lost sales. European Journal of Operational Research, 187(3), 1251-1267.
Please cite this item using this persistent URLhttp://hdl.handle.net/11693/11597
We consider the dynamic lot-sizing problem with finite capacity and possible lost sales for a process that could be kept warm at a unit variable cost for the next period t + 1 only if more than a threshold value Qt has been produced and would be cold, otherwise. Production with a cold process incurs a fixed positive setup cost, Kt and setup time, St, which may be positive. Setup costs and times for a warm process are negligible. We develop a dynamic programming formulation of the problem, establish theoretical results on the structure of the optimal production plan in the presence of zero and positive setup times with Wagner–Whitin-type cost structures. We also show that the solution to the dynamic lot-sizing problem with lost sales are generated from the full commitment production series improved via lost sales decisions in the presence of a warm/cold process. 2006 Elsevier B.V. All rights reserved.
- Department of Management