An Algorithm for Infinite Horizon Lot Sizing with Deterministic Demand

Milan Horniaček

Faculty of Social and Economic Sciences, Institute of Public Policy and Economics, Comenius University in Bratislava, Mlynske luhy 4, Bratislava, Slovakia.

DOI: 10.4236/am.2014.52023                

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.

Keywords

Natural Asset; Financial Value; Neural Network

Conflicts of Interest

The authors declare no conflicts of interest.

References

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