A discrete EOQ problem is solvable in O(logn) time

Mikhail Kovalev () and C.T. Ng

European Journal of Operational Research, 2008, vol. 189, issue 3, 914-919

Abstract: The Economic Order Quantity problem is a fundamental problem of inventory management. An optimal solution to this problem in a closed form exists under the assumption that time and the product are continuously divisible and demand occurs at a constant rate [lambda]. We prove that a discrete version of this problem, in which time and the product are discrete is solvable in O(logn) time, where n is the length of the time period where the demand takes place. The key elements of our approach are a reduction of the original problem to a discrete minimization problem of one variable representing the number of orders and a proof that the objective function of this problem is convex. According to our approach, optimal order sizes can take at most two distinct values: and , where k* is the optimal number of orders.

Date: 2008
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:189:y:2008:i:3:p:914-919

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