On the ( t, Sj) policy in an integrated production/inventory model with time-proportional demand

In this paper, we consider a two-level continuous time lotsizing problem with setup costs, inventory holding costs and time-proportional demand for a single end product and the raw materials used for manufacturing it. We analyze a ( t, S j ) ordering policy for the production of the end product, whe...

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Bibliographic Details
Published inEuropean journal of operational research Vol. 69; no. 2; pp. 154 - 165
Main Authors Hong, Jae-Dong, Cavalier, Tom M., Hayya, Jack C.
Format Journal Article
LanguageEnglish
Published Amsterdam Elsevier B.V 10.09.1993
Elsevier
Elsevier Sequoia S.A
SeriesEuropean Journal of Operational Research
Subjects
Applied sciences
Continuous time lotsizing with time-proportional demand
Cost analysis
Exact sciences and technology
Inventory
Inventory control, production control. Distribution
Inventory management
Lagrangian relaxation
Manufacturing
Mathematical programming
Operational research and scientific management
Operational research. Management science
Operations research
Statistical analysis
Lagrangian relaxation
Continuous time lotsizing with time-proportional demand
Mathematical programming
Cost minimization
Relaxation
Production control
Heuristic method
Inventory control
Lot sizing
Lagrangian method
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Summary:In this paper, we consider a two-level continuous time lotsizing problem with setup costs, inventory holding costs and time-proportional demand for a single end product and the raw materials used for manufacturing it. We analyze a ( t, S j ) ordering policy for the production of the end product, where at every equal and fixed scheduling cycle, t, a variable production quantity, S j , is produced during the j-th cycle. With the objective of minimizing the integrated total relevant cost, we formulate a mathematical programming problem to determine simultaneously the economic batch sizes for the end product and the economic order sizes for the raw materials. A heuristic is developed using the Lagrangian multiplier, and its solution compares very well with the exact solution. We compare the numerical results with the equal batch sizing policy, i.e., the ( s, Q) policy, which is expected to be outperformed by the ( t, S j ) policy, and find that is not always the case.
ISSN:0377-2217
1872-6860
DOI:10.1016/0377-2217(93)90160-O