Berk, E.Toy, A. Ö.Hazır, Ö.2015-07-282015-07-282008-06-160377-2217http://hdl.handle.net/11693/11597We 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.EnglishDynamic lot sizingWarm/cold processLost salesSetup timesSetup costsSchedulingArticle10.1016/j.ejor.2006.06.070