Two-echelon requirements planning with pricing decisions

Abstract

We consider a two-level uncapacitated lot-sizing problem where production, inventory carrying, transportation, and pricing decisions are integrated to maximize total profits. We show how this problem, under many different revenue functions and production, inventory holding, and transportation cost structures can be solved in polynomial time. As a byproduct, we develop polynomial-time algorithms for generalizations of single-level lot-sizing problems with pricing as well.