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Article: On the effectiveness of zero-inventory-ordering policies for the economic lot-sizing model with a class of piecewise linear cost structures
Title | On the effectiveness of zero-inventory-ordering policies for the economic lot-sizing model with a class of piecewise linear cost structures |
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Authors | |
Issue Date | 2002 |
Citation | Operations Research, 2002, v. 50, n. 6, p. 1058-1067 How to Cite? |
Abstract | We consider an economic lot-sizing problem with a special class of piecewise linear ordering costs, which we refer to as the class of modified all-unit discount cost functions. Such an ordering cost function represents transportation costs charged by many less-than-truckload carriers. We show that even special cases of the lot-sizing problem are NP-hard and therefore analyze the effectiveness of easily implementable policies. In particular, we demonstrate that there exists a zero-inventory-ordering (ZIO) policy, i.e., a policy in which an order is placed only when the inventory level drops to zero, whose total inventory and ordering cost is no more than 4/3 times the optimal cost. Furthermore, if the ordering cost function does not vary over time, then the cost of the best ZIO policy is no more than 5.6/4.6 times the optimal cost. These results hold for any transportation and holding cost functions that satisfy the following properties: (i) they are nondecreasing functions, and (ii) the associated cost per unit is nonincreasing. Finally, we report on a numerical study that shows the effectiveness of ZIO policies on a set of test problems. |
Persistent Identifier | http://hdl.handle.net/10722/296019 |
ISSN | 2021 Impact Factor: 3.924 2020 SCImago Journal Rankings: 3.797 |
ISI Accession Number ID |
DC Field | Value | Language |
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dc.contributor.author | Chan, Lap Mui Ann | - |
dc.contributor.author | Muriel, Ana | - |
dc.contributor.author | Shen, Zuo Jun | - |
dc.contributor.author | Simchi-Levi, David | - |
dc.date.accessioned | 2021-02-11T04:52:39Z | - |
dc.date.available | 2021-02-11T04:52:39Z | - |
dc.date.issued | 2002 | - |
dc.identifier.citation | Operations Research, 2002, v. 50, n. 6, p. 1058-1067 | - |
dc.identifier.issn | 0030-364X | - |
dc.identifier.uri | http://hdl.handle.net/10722/296019 | - |
dc.description.abstract | We consider an economic lot-sizing problem with a special class of piecewise linear ordering costs, which we refer to as the class of modified all-unit discount cost functions. Such an ordering cost function represents transportation costs charged by many less-than-truckload carriers. We show that even special cases of the lot-sizing problem are NP-hard and therefore analyze the effectiveness of easily implementable policies. In particular, we demonstrate that there exists a zero-inventory-ordering (ZIO) policy, i.e., a policy in which an order is placed only when the inventory level drops to zero, whose total inventory and ordering cost is no more than 4/3 times the optimal cost. Furthermore, if the ordering cost function does not vary over time, then the cost of the best ZIO policy is no more than 5.6/4.6 times the optimal cost. These results hold for any transportation and holding cost functions that satisfy the following properties: (i) they are nondecreasing functions, and (ii) the associated cost per unit is nonincreasing. Finally, we report on a numerical study that shows the effectiveness of ZIO policies on a set of test problems. | - |
dc.language | eng | - |
dc.relation.ispartof | Operations Research | - |
dc.title | On the effectiveness of zero-inventory-ordering policies for the economic lot-sizing model with a class of piecewise linear cost structures | - |
dc.type | Article | - |
dc.description.nature | link_to_subscribed_fulltext | - |
dc.identifier.doi | 10.1287/opre.50.6.1058.350 | - |
dc.identifier.scopus | eid_2-s2.0-0036877284 | - |
dc.identifier.volume | 50 | - |
dc.identifier.issue | 6 | - |
dc.identifier.spage | 1058 | - |
dc.identifier.epage | 1067 | - |
dc.identifier.isi | WOS:000179794700012 | - |
dc.identifier.issnl | 0030-364X | - |