Large-Scale Joint Price-Inventory Decision Problems, Under Resource Limitation and a Discrete Price Set

Authors:
Guillaume Lanquepin-Chesnais;Kjetil K. Haugen;Asmund Olstad
Affiliations:
Høgskolen i Molde, Molde, Norway 6411;Høgskolen i Molde, Molde, Norway 6411;Høgskolen i Molde, Molde, Norway 6411
Venue:
Journal of Mathematical Modelling and Algorithms
Year:
2012

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Abstract

This article addresses a generalization of the capacitated lot-size problem (CLSP) as well as the profit maximization capacitated lot-size problem (PCLSP) considering joint price inventory decisions. This problem maximizes profit over a discrete set of prices subject to resource limitations. We propose a heuristic based on Lagrangian relaxation to resolve the problem, especially aiming for large scale cases. Results of experimentation exhibit the major importance of the capacity constraint. When this one is weak, our heuristic performs particularly well, moreover the numbers of possible prices does not really impact the results.