The Dynamic Lot-Sizing Problem with Startup and Reservation Costs

Uday S. Karmarkar, Sham Kekre and Sunder Kekre
Additional contact information
Uday S. Karmarkar: University of Rochester, Rochester, New York
Sham Kekre: Eastman Kodak Company, Rochester, New York
Sunder Kekre: Carnegie-Mellon University, Pittsburgh, Pennsylvania

Operations Research, 1987, vol. 35, issue 3, 389-398

Abstract: Dynamic lot-sizing models often assume that a production system incurs a fixed cost in each period that production is positive. In this paper, we consider a model with a startup cost incurred for switching on the production facility and a separate reservation cost charged for keeping the facility on whether or not it is used for production. Computationally, this problem is as hard as the usual model; the general capacitated case is NP-hard. We present a dynamic programming algorithm for the uncapacitated case, and a branch-and-bound approach using Lagrangian relaxation for the capacitated problem. We report computational experience on both the quality of the bounds employed and the effectiveness of the algorithm.

Keywords: 334 dynamic lot sizing; 630 production planning (search for similar items in EconPapers)
Date: 1987
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Citations: View citations in EconPapers (19)

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