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An Algorithm for Infinite Horizon Lot Sizing with Deterministic Demand

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DOI: 10.4236/am.2014.52023    2,596 Downloads   4,162 Views   Citations

ABSTRACT

We analyze an infinite horizon discrete time inventory model with deterministic but non-stationary demand for a single product at a single stage. There is a finite cycle of vectors of characteristics of the environment (demand, fixed ordering cost, variable procurement cost, holding cost) which is repeated after a finite number of periods. Future cost is discounted. In general, minimization of the sum of discounted total cost over the cycle does not give the minimum of the sum of discounted total cost over the infinite horizon. We construct an algorithm for computing of an optimal strategy over the infinite horizon. It is based on a forward in time dynamic programming recursion.

Conflicts of Interest

The authors declare no conflicts of interest.

Cite this paper

M. Horniaček, "An Algorithm for Infinite Horizon Lot Sizing with Deterministic Demand," Applied Mathematics, Vol. 5 No. 2, 2014, pp. 217-225. doi: 10.4236/am.2014.52023.

References

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http://dx.doi.org/10.1007/978-0-387-68948-7
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[4] H. M. Wagner and T. M. Whitin, “Dynamic Version of the Economic Lot Size Model,” Management Science, Vol. 5, No. 1, 1958, pp. 89-96. http://dx.doi.org/10.1287/mnsc.5.1.89

  
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