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A dynamic lot-sizing-based profit maximization discounted cash flow model considering working capital requirement financing cost with infinite production capacity

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  • Yuan Bian

    (IMT Atlantique - DAPI - Département Automatique, Productique et Informatique - IMT Atlantique - IMT Atlantique - IMT - Institut Mines-Télécom [Paris], LS2N - équipe SLP - Systèmes Logistiques et de Production - LS2N - Laboratoire des Sciences du Numérique de Nantes - UN UFR ST - Université de Nantes - UFR des Sciences et des Techniques - UN - Université de Nantes - ECN - École Centrale de Nantes - CNRS - Centre National de la Recherche Scientifique - IMT Atlantique - IMT Atlantique - IMT - Institut Mines-Télécom [Paris])

  • David Lemoine

    (IMT Atlantique - DAPI - Département Automatique, Productique et Informatique - IMT Atlantique - IMT Atlantique - IMT - Institut Mines-Télécom [Paris], LS2N - équipe SLP - Systèmes Logistiques et de Production - LS2N - Laboratoire des Sciences du Numérique de Nantes - UN UFR ST - Université de Nantes - UFR des Sciences et des Techniques - UN - Université de Nantes - ECN - École Centrale de Nantes - CNRS - Centre National de la Recherche Scientifique - IMT Atlantique - IMT Atlantique - IMT - Institut Mines-Télécom [Paris])

  • Thomas G. Yeung

    (IMT Atlantique - DAPI - Département Automatique, Productique et Informatique - IMT Atlantique - IMT Atlantique - IMT - Institut Mines-Télécom [Paris], LS2N - équipe SLP - Systèmes Logistiques et de Production - LS2N - Laboratoire des Sciences du Numérique de Nantes - UN UFR ST - Université de Nantes - UFR des Sciences et des Techniques - UN - Université de Nantes - ECN - École Centrale de Nantes - CNRS - Centre National de la Recherche Scientifique - IMT Atlantique - IMT Atlantique - IMT - Institut Mines-Télécom [Paris])

  • Nathalie Bostel

    (LS2N - équipe SLP - Systèmes Logistiques et de Production - LS2N - Laboratoire des Sciences du Numérique de Nantes - UN UFR ST - Université de Nantes - UFR des Sciences et des Techniques - UN - Université de Nantes - ECN - École Centrale de Nantes - CNRS - Centre National de la Recherche Scientifique - IMT Atlantique - IMT Atlantique - IMT - Institut Mines-Télécom [Paris])

  • Vincent Hovelaque

    (CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR - Université de Rennes - CNRS - Centre National de la Recherche Scientifique)

  • Jean-Laurent Viviani

    (CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR - Université de Rennes - CNRS - Centre National de la Recherche Scientifique)

  • Fabrice Gayraud

    (IMT Atlantique - DAPI - Département Automatique, Productique et Informatique - IMT Atlantique - IMT Atlantique - IMT - Institut Mines-Télécom [Paris], LS2N - équipe SLP - Systèmes Logistiques et de Production - LS2N - Laboratoire des Sciences du Numérique de Nantes - UN UFR ST - Université de Nantes - UFR des Sciences et des Techniques - UN - Université de Nantes - ECN - École Centrale de Nantes - CNRS - Centre National de la Recherche Scientifique - IMT Atlantique - IMT Atlantique - IMT - Institut Mines-Télécom [Paris])

Abstract

In times of crisis, companies need free cash flow to efficiently react against all uncertainty to ensure solvency. However, classical dynamic lot-sizing models only consider the physical flow of goods. In this paper, we introduce a first link between dynamic lot-sizing and the financial aspects of working capital requirements (WCR). We propose a new generic WCR model which allows us to evaluate the company's financial situation throughout the planning horizon. Moreover, a dynamic lot-sizing-based, discounted cash flow model is established for single-site, single-level, single-product and infinite capacity cases. It is shown that the zero-inventory ordering property holds for this case and thus a polynomial-time algorithm may be utilized. Numerical tests are presented in order to show the relevance of our approach compared with the traditional dynamic lot-sizing model.

Suggested Citation

  • Yuan Bian & David Lemoine & Thomas G. Yeung & Nathalie Bostel & Vincent Hovelaque & Jean-Laurent Viviani & Fabrice Gayraud, 2018. "A dynamic lot-sizing-based profit maximization discounted cash flow model considering working capital requirement financing cost with infinite production capacity," Post-Print halshs-01683781, HAL.
  • Handle: RePEc:hal:journl:halshs-01683781
    DOI: 10.1016/j.ijpe.2017.12.002
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01683781
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    7. Kajjoune, Oussama & Aouam, Tarik & Zouadi, Tarik & Ranjan, Ravi Prakash, 2023. "Dynamic lot-sizing in a two-stage supply chain with liquidity constraints and financing options," International Journal of Production Economics, Elsevier, vol. 258(C).
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