TITLE:
An Algorithm for Infinite Horizon Lot Sizing with Deterministic Demand
AUTHORS:
Milan Horniaček
KEYWORDS:
Natural Asset; Financial Value; Neural Network
JOURNAL NAME:
Applied Mathematics,
Vol.5 No.2,
January
17,
2014
ABSTRACT:
We analyze an infinite
horizon discrete time inventory model with deterministic but non-stationary
demand for a single product at a single stage. There is a finite cycle of
vectors of characteristics of the environment (demand, fixed ordering cost,
variable procurement cost, holding cost) which is repeated after a finite number of periods. Future cost is
discounted. In general, minimization of the sum of discounted total cost over
the cycle does not give the minimum of the sum of discounted total cost over the
infinite horizon. We construct an algorithm for computing of an optimal
strategy over the infinite horizon. It is based on a forward in time dynamic
programming recursion.