Optimal time varying lot-sizing models under inflationary conditions

Abstract

This paper deals with the inventory replenishment problem over a fixed planning horizon for items with linearly time-varying demand and under inflationary conditions. We develop models and optimal solution procedures with and without shortages. We do not put any restriction on the length of the replenishment cycles making the proposed methods the first optimal solution procedure for this problem. Using four examples, we illustrate the proposed solution procedures and study the effect of changing the inflation and discount rates on the optimal replenishment schedules.