F. Zeynep Sargut, H. Edwin Romeijn
Capacitated requirements planning with pricing flexibility and general cost and revenue functions
The requirements problem with pricing flexibility
generalizes the standard economic lot-sizing problem by
recognizing that the demand for a good can often be influenced by
adjusting its price level. This naturally leads to a profit
maximization model that integrates price setting as well as
production and inventory management. In this paper, we consider
the NP-hard problem that arises in the presence of general cost
functions as well as time-varying production capacities. We study
a reformulation of the problem as an economic lot-sizing problem
and use this reformulation to derive running times for dynamic
programming and approximation algorithms for the requirements
planning problem.