An enhanced forward dynamic programming approach for the lot size problem with time-dependent demand

Y. Tian, W. H. Lin

Research output: Chapter in Book/Report/Conference proceedingConference contribution

Abstract

The lot size problem for one-to-one distribution with variable demands has long been studied in logistics. The trade-offs in this problem are the transportation cost and a set of other costs, including the rent cost and the inventory cost. Conventionally, rent cost and inventory cost are considered separately. The Economic Order Quantity model is applied to the case where the rent cost dominates, whereas a heuristic-based forward dynamic programming method is usually utilized for the case where the inventory cost dominates. This paper considers the three costs jointly by proposing an enhanced forward dynamic programming approach. Properties leading to the optimal solution are identified. Sensitivity analyses are performed to examine the validity of the method for a range of cost coefficients for inventories and rents. Numerical tests are performed with different demand functions. The results indicate that the approach proposed is promising in terms of computation time and solution quality.

Original languageEnglish (US)
Title of host publicationProceedings of the 18th International Conference of Hong Kong Society for Transportation Studies, HKSTS 2013 - Travel Behaviour and Society
PublisherHong Kong Society for Transportation Studies Limited
Pages617-624
Number of pages8
ISBN (Print)9789881581426
StatePublished - 2013
Event18th International Conference of Hong Kong Society for Transportation Studies on Travel Behaviour and Society, HKSTS 2013 - Hong Kong, Hong Kong
Duration: Dec 14 2013Dec 16 2013

Publication series

NameProceedings of the 18th International Conference of Hong Kong Society for Transportation Studies, HKSTS 2013 - Travel Behaviour and Society

Other

Other18th International Conference of Hong Kong Society for Transportation Studies on Travel Behaviour and Society, HKSTS 2013
Country/TerritoryHong Kong
CityHong Kong
Period12/14/1312/16/13

Keywords

  • Forward dynamic programming
  • Inventory cost
  • Lot-size problem
  • Rent cost
  • Transportation cost

ASJC Scopus subject areas

  • Transportation

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