Large‐Scale Joint Price‐Inventory Decision Problems, Under Resource Limitation and a Discrete Price Set

Large‐Scale Joint Price‐Inventory Decision Problems, Under Resource Limitation and a Discrete Price Set

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Article ID: iaor20125630
Volume: 11
Issue: 3
Start Page Number: 269
End Page Number: 280
Publication Date: Sep 2012
Journal: Journal of Mathematical Modelling and Algorithms
Authors: , ,
Keywords: inventory, combinatorial optimization, heuristics
Abstract:

This article addresses a generalization of the capacitated lot‐size problem (CLSP) as well as the profit maximization capacitated lot‐size problem (PCLSP) considering joint price inventory decisions. This problem maximizes profit over a discrete set of prices subject to resource limitations. We propose a heuristic based on Lagrangian relaxation to resolve the problem, especially aiming for large scale cases. Results of experimentation exhibit the major importance of the capacity constraint. When this one is weak, our heuristic performs particularly well, moreover the numbers of possible prices does not really impact the results.

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