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| Author: | Atamturk, A. Hochbaum, D. S. |
| Title: | Capacity Acquisition, Subcontracting, and Lot Sizing |
| Journal: | Management Science
2001 : AUG, VOL. 47:8, p. 1081-1100 |
| Index terms: | ALGORITHMS COSTS CAPACITY COSTS LOT-SIZE MODEL |
| Language: | eng |
| Abstract: | In this paper, the authors investigate the trade-offs between acquiring capacity, subcontracting, production, and holding inventory to satisfy nonstationary demand over a finite horizon. The authors present capacity acquisition models with holding and without holding inventory and identify forecast-robust properties of the models that restrict the dependence of optimal capacity decisions on the demand forecasts. The authors develop algorithms for numerous practical cost structures involving variable and fixed charges and prove that they all have polynomial time complexity. For models with inventory, the authors solve a sequence of constant capacity lot-sizing and subcontracting subproblems, which is also of independent interest. |
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