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Joint optimization of dynamic lot and warehouse sizing problems

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  • Fan, Jie
  • Wang, Guoqing

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.

Suggested Citation

  • Fan, Jie & Wang, Guoqing, 2018. "Joint optimization of dynamic lot and warehouse sizing problems," European Journal of Operational Research, Elsevier, vol. 267(3), pages 849-854.
  • Handle: RePEc:eee:ejores:v:267:y:2018:i:3:p:849-854
    DOI: 10.1016/j.ejor.2017.12.019
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    References listed on IDEAS

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    1. Gutiérrez, J. & Sedeí±o-Noda, A. & Colebrook, M. & Sicilia, J., 2008. "An efficient approach for solving the lot-sizing problem with time-varying storage capacities," European Journal of Operational Research, Elsevier, vol. 189(3), pages 682-693, September.
    2. James R. Bradley & Bruce C. Arntzen, 1999. "The Simultaneous Planning of Production, Capacity, and Inventory in Seasonal Demand Environments," Operations Research, INFORMS, vol. 47(6), pages 795-806, December.
    3. Önal, Mehmet & van den Heuvel, Wilco & Liu, Tieming, 2012. "A note on “The economic lot sizing problem with inventory bounds”," European Journal of Operational Research, Elsevier, vol. 223(1), pages 290-294.
    4. Harvey M. Wagner & Thomson M. Whitin, 1958. "Dynamic Version of the Economic Lot Size Model," Management Science, INFORMS, vol. 5(1), pages 89-96, October.
    5. Liu, X. & Tu, Yl., 2008. "Production planning with limited inventory capacity and allowed stockout," International Journal of Production Economics, Elsevier, vol. 111(1), pages 180-191, January.
    6. repec:taf:uiiexx:v:45:y:2013:i:8:p:912-924 is not listed on IDEAS
    7. Alper Atamtürk & Dorit S. Hochbaum, 2001. "Capacity Acquisition, Subcontracting, and Lot Sizing," Management Science, INFORMS, vol. 47(8), pages 1081-1100, August.
    8. Rao, A. K. & Rao, M. R., 1998. "Solution procedures for sizing of warehouses," European Journal of Operational Research, Elsevier, vol. 108(1), pages 16-25, July.
    9. Archetti, Claudia & Bertazzi, Luca & Grazia Speranza, M., 2014. "Polynomial cases of the economic lot sizing problem with cost discounts," European Journal of Operational Research, Elsevier, vol. 237(2), pages 519-527.
    10. Liu, Tieming, 2008. "Economic lot sizing problem with inventory bounds," European Journal of Operational Research, Elsevier, vol. 185(1), pages 204-215, February.
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