Title: A stochastic profit-maximising economic lot scheduling problem with price optimisation

Authors: Luciano Salvietti; Neale R. Smith; Leopoldo Eduardo Cárdenas-Barrón

Addresses: Center for Quality and Manufacturing, School of Engineering Tecnológico de Monterrey, 2501 Garza Sada Av., C.P. 64849, Monterrey, México ' Center for Quality and Manufacturing, School of Engineering Tecnológico de Monterrey, 2501 Garza Sada Av., C.P. 64849, Monterrey, México ' Center for Quality and Manufacturing, School of Engineering Tecnológico de Monterrey, 2501 Garza Sada Av., C.P. 64849, Monterrey, México

Abstract: A stochastic version of the economic lot sizing problem with pricing is presented. The control variables of the stochastic problem are the production quantities and cycle lengths for each product. The recourse variables are the sales prices and the external purchase quantities in each production cycle. A solution method based on simulation, decomposition, and column generation is proposed and tested using a number of designed experiments. The method is found to produce very close to optimal solutions quickly. [Received 29 January 2011; Revised 6 February 2011; Revised 21 March 2012; Accepted 3 October 2012]

Keywords: economic lot scheduling problem; stochastic ELSP; price optimisation; inventory control; cycle length; economic production quantity; EPQ; simulation; decomposition; column generation.

DOI: 10.1504/EJIE.2014.060437

European Journal of Industrial Engineering, 2014 Vol.8 No.2, pp.193 - 221

Received: 08 May 2021
Accepted: 12 May 2021

Published online: 16 Apr 2014 *

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