The common cycle economic lot scheduling problem with backorders: Benefits of controllable production rates (Q1359127)

A version of ELSP when the production rates are controllable during the production run of a product is studied under the assumption that unsatisfied demand is completely backordered. The objective is to determine the optimal schedule that satisfies the demand for all products and that realizes the minimum average setup, inventory holding and backlog cost per unit time. For the two-product problem it is shown that the optimal production rates can take on only three values, namely zero, demand rate, maximum rate and the optimal solution is derived analytically. For the \(m\)-product problem, to obtain the optimal solution numerically, a simplified version of Zoutendijk' algorithm is proposed.