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Production, Inventory and Capacity Expansion Scheduling with Integer Variables

Author

Listed:
  • R. H. Barchi

    (United States Navy)

  • F. T. Sparrow

    (United States Navy)

  • R. R. Vemuganti

    (The Johns Hopkins University, Department of Operations Research)

Abstract

The combined production-inventory and capacity expansion problem is modeled as a linear, integer program. The model assumes constant returns to scale in the production function of a firm which must meet, at minimum cost, deterministic demands for a single product over N periods with no backordering. A linear transformation is used to obtain an equivalent form of the model which is then decomposed into fixed cost and variable cost parts. A global optimum is obtained by enumerating on the fixed cost variables and solving transportation sub-problems with the remaining variables. Special demand and cost structures and extensions are discussed, and computational experience presented.

Suggested Citation

  • R. H. Barchi & F. T. Sparrow & R. R. Vemuganti, 1975. "Production, Inventory and Capacity Expansion Scheduling with Integer Variables," Management Science, INFORMS, vol. 21(7), pages 783-793, March.
    • Handle: RePEc:inm:ormnsc:v:21:y:1975:i:7:p:783-793
    DOI: 10.1287/mnsc.21.7.783
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