Strong Decision and Forecast Horizons in a Convex Production Planning Problem

Optimal Control Applications & Methods, Vol. 5, pp. 319-330, 1984

12 Pages Posted: 21 Jun 2009 Last revised: 26 Apr 2014

See all articles by Jinn-Tsair Teng

Jinn-Tsair Teng

William Paterson University of New Jersey

Gerald L. Thompson

Carnegie Mellon University

Suresh Sethi

University of Texas at Dallas - Naveen Jindal School of Management

Date Written: 1984

Abstract

We consider a production-inventory planning problem with time-varying demands, convex production costs and a warehouse capacity constraint. It is solved by use of the Lagrangian form of the maximum principle. The possible existence of strong decision and forecast horizons is demonstrated. When they exist, they permit the breaking up of the whole problem into a set of smaller problems which can be solved independently because optimal decisions up to a strong decision horizon are completely independent of demand data beyond the next forecast horizon. A forward branch and bound algorithm is developed to determine such horizons and to solve the whole problem.

Keywords: Production-inventory planning, strong decision and forecast horizons, warehouse capacity constraints, branch and bound algorithms

JEL Classification: M11, C61, M20

Suggested Citation

Teng, Jinn-Tsair and Thompson, Gerald L. and Sethi, Suresh, Strong Decision and Forecast Horizons in a Convex Production Planning Problem (1984). Optimal Control Applications & Methods, Vol. 5, pp. 319-330, 1984, Available at SSRN: https://ssrn.com/abstract=1421980

Jinn-Tsair Teng

William Paterson University of New Jersey ( email )

300 Pompton Road
Wayne, NJ 07470
United States

Gerald L. Thompson

Carnegie Mellon University ( email )

Pittsburgh, PA 15213-3890
United States

Suresh Sethi (Contact Author)

University of Texas at Dallas - Naveen Jindal School of Management ( email )

800 W. Campbell Road, SM30
Richardson, TX 75080-3021
United States

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