Dynamic lot-sizing model for major and minor demands

This paper deals with a lot-sizing model for major and minor demands in which major demands are specified by time windows while minor demands are given by periods. For major demands, the agreeable time window structure is assumed where each time window is not strictly nested in any other time windows. To incorporate the economy of scale of large production quantity, especially from major demands, concave cost structure in production must be considered. Investigating the optimality properties, we propose optimal solution procedures based on dynamic program. For a simple case when only major demands exist, we propose an optimal procedure with running time of O(n2T)O(n2T) where n is the number of demands and T   is the length of the planning horizon. Extending the algorithm to the model with major and minor demands, we propose an algorithm with complexity O(n2T2)O(n2T2).