Article ID: | iaor2009299 |
Country: | United States |
Volume: | 39 |
Issue: | 11 |
Start Page Number: | 1059 |
End Page Number: | 1069 |
Publication Date: | Nov 2007 |
Journal: | IIE Transactions |
Authors: | Chand Suresh |
Keywords: | programming: dynamic |
This paper considers a dynamic lot sizing problem faced by a producer who supplies a single product to multiple customers. Characterized by their backorder costs as well as shipping costs, a customer with a high backorder cost has a greater need for the product than a customer with a low backorder cost. We show that the general problem with time-varying customer-dependent backlogging and shipping costs is NP-hard in the strong sense. We then develop an efficient dynamic programming algorithm for an important instance of the problem when there is no speculative motive for backlogging.