A Dynamic Lot-Sizing Model with Demand Time Windows

Chung-Yee Lee (), Sila Çetinkaya () and Albert P. M. Wagelmans ()
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Chung-Yee Lee: Department of Industrial Engineering, Texas A...M University, College Station, Texas 77843-3131
Sila Çetinkaya: Department of Industrial Engineering, Texas A...M University, College Station, Texas 77843-3131
Albert P. M. Wagelmans: Econometric Institute and RIBES, Erasmus University Rotterdam, P.O.Box 1738, 3000 DR Rotterdam, The Netherlands

Management Science, 2001, vol. 47, issue 10, 1384-1395

Abstract: One of the basic assumptions of the classical dynamic lot-sizing model is that the aggregate demand of a given period must be satisfied in that period. Under this assumption, if backlogging is not allowed, then the demand of a given period cannot be delivered earlier or later than the period. If backlogging is allowed, the demand of a given period cannot be delivered earlier than the period, but it can be delivered later at the expense of a backordering cost. Like most mathematical models, the classical dynamic lot-sizing model is a simplified paraphrase of what might actually happen in real life. In most real-life applications, the customer offers a grace period---we call it a demand time window---during which a particular demand can be satisfied with no penalty. That is, in association with each demand, the customer specifies an acceptable earliest and a latest delivery time. The time interval characterized by the earliest and latest delivery dates of a demand represents the corresponding time window. This paper studies the dynamic lot-sizing problem with demand time windows and provides polynomial time algorithms for computing its solution. If backlogging is not allowed, the complexity of the proposed algorithm is O(T 2 ) where T is the length of the planning horizon. When backlogging is allowed, the complexity of the proposed algorithm is O(T 3 ).

Keywords: Lot Sizing; Dynamic Programming; Time Windows (search for similar items in EconPapers)
Date: 2001
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Citations: View citations in EconPapers (21)

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