A discrete EOQ problem with maximum order size costs

Mikhail Y. Kovalyov, Edwin Tai Chiu Cheng, Vladimir Kotov, Chi To Ng

Research output: Chapter in book / Conference proceedingConference article published in proceeding or bookAcademic researchpeer-review

Abstract

The Economic Order Quantity (EOQ) problem is a fundamental problem in supply and inventory management. An optimal solution to this problem in a closed form exists under the assumption that time and the product are continuously divisible. This paper studies problem D-EOQ, in which time and the product are discrete. Furthermore, in the objective function, there is a fixed cost for each order and a fixed cost for each product unit in an order of the maximum size. It is shown that the continuous relaxation of problem D-EOQ provides a solution that can be up to 50% worse than the optimal solution and this worst-case error bound is tight. Properties of an optimal solution of the problem D-EOQ are established. These properties allow to solve many special cases in polynomial time and can be used to derive a polynomial time algorithm for the general case of the problem D-EOQ.
Original languageEnglish
Title of host publication12th IFAC Symposium on Information Control Problems in Manufacturing, INCOM 2006, and Associated Industrial Meetings
Subtitle of host publicationEMM'2006, BPM'2006, JT'2006
Volume12
EditionPART 1
Publication statusPublished - 1 Dec 2006
Event12th IFAC Symposium on Information Control Problems in Manufacturing, INCOM 2006, and Associated Industrial Meetings: EMM'2006, BPM'2006, JT'2006 - Saint - Etienne, France
Duration: 17 May 200619 May 2006

Conference

Conference12th IFAC Symposium on Information Control Problems in Manufacturing, INCOM 2006, and Associated Industrial Meetings: EMM'2006, BPM'2006, JT'2006
Country/TerritoryFrance
CitySaint - Etienne
Period17/05/0619/05/06

Keywords

  • Algorithms
  • Inventory control

ASJC Scopus subject areas

  • Control and Systems Engineering

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