F. Zeynep Sargut, H. Edwin Romeijn
Capacitated production and subcontracting in a serial
supply chain
This paper extends a series of recent results regarding the polynomial solvability of
single and two-echelon deterministic lot-sizing models. In particular, we consider a
two-echelon supply chain in which production, inventory, transportation, backlogging, and
subcontracting decisions are integrated. We allow for arbitrary concave cost functions
and for stationary production and subcontracting capacities. We develop dynamic
programming algorithms for various problems in this class that run in polynomial time
in the planning horizon of the problem.