Production planning and inventories optimization: A backward approach in the convex storage cost case
We study the deterministic optimization problem of a profit-maximizing firm which plans its sales/production schedule. The firm controls both its production and sales rates and knows the revenue associated to a given level of sales, as well as its production and storage costs. The revenue and the production cost are assumed to be respectively concave and convex. In Chazal et al. [Chazal, M., Jouini, E., Tahraoui, R., 2003. Production planning and inventories optimization with a general storage cost function. Nonlinear Analysis 54, 1365-1395], we provide an existence result and derive some necessary conditions of optimality. Here, we further assume that the storage cost is convex. This allows us to relate the optimal planning problem to the study of a backward integro-differential equation, from which we obtain an explicit construction of the optimal plan.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Feichtinger, Gustav & Hartl, Richard, 1985. "Optimal pricing and production in an inventory model," European Journal of Operational Research, Elsevier, vol. 19(1), pages 45-56, January.
- Tharaoui, Rabah & Chazal, Marie & Jouini, Elyès, 2003. "Production planning and inventories optimization with a general storage cost function," Economics Papers from University Paris Dauphine 123456789/360, Paris Dauphine University.
When requesting a correction, please mention this item's handle: RePEc:eee:mateco:v:44:y:2008:i:9-10:p:997-1023. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If references are entirely missing, you can add them using this form.