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EXISTENCE AND DERIVATION OF FORECAST HORIZONS IN A DYNAMIC LOT SIZE MODEL WITH NONDECREASING HOLDING COSTS
Author(s) -
BYLKA STANISLAW,
SETHI SURESH
Publication year - 1992
Publication title -
production and operations management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 3.279
H-Index - 110
eISSN - 1937-5956
pISSN - 1059-1478
DOI - 10.1111/j.1937-5956.1992.tb00353.x
Subject(s) - constant (computer programming) , function (biology) , holding cost , horizon , time horizon , mathematics , mathematical optimization , discrete time and continuous time , mathematical economics , economics , computer science , statistics , geometry , evolutionary biology , biology , programming language
We are concerned with a discrete‐time undiscounted dynamic lot size model in which demand and the production setup cost are constant for an initial few periods and the holding cost of inventory is an arbitrary nondecreasing function assumed to be stationary (i.e., explicitly independent of time) in the same initial few periods. We show that there exists a finite forecast horizon in our model and obtain an explicit formula for it. In addition, we obtain fairly general conditions under which the existence of a solution horizon in the model implies the existence of a forecast horizon. We also derive an explicit formula for the minimal solution horizon. These results extend the earlier ones obtained for the dynamic lot size model with linearly increasing holding costs.