Joint optimization of dynamic lot and warehouse sizing problems

Jie Fan and Guoqing Wang

European Journal of Operational Research, 2018, vol. 267, issue 3, 849-854

Abstract: We consider an integrated model of inventory and warehousing decisions for a single product. In this model, dynamic lot size decisions are considered under constraints of the warehouse size that can be either increased or decreased at the beginning of each period. The ordering cost is typically a fixed cost and the holding cost is assumed to be a linear function. Each adjustment of the warehouse size incurs a fixed-plus-linear adjustment cost. A lease cost has to be paid for the warehouse size in each period. We provide an efficient algorithm to solve the problem. Further, we present computational experiments that show the efficiency of the algorithm and the effectiveness of the model.

Keywords: Dynamic programming; Dynamic lot sizing; Warehouse sizing; Inventory bound; Exact algorithm (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:267:y:2018:i:3:p:849-854

DOI: 10.1016/j.ejor.2017.12.019

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