Some New Dynamic Economic Lot Sizing Models

We introduce a dynamic economic lot sizing problem whose production cost considers both setup and the designed-and-yet stretchable production capacity. Demands and the control on production activities drive the evolution of the production system. We give a pseudo-polynomial algorithm for the problem when future demands are known. When there is uncertainty in future demands and there is no holding of inventory, we propose a two-layered solution process which considers demand acceptance first and level of production next. We also construct a mixed model which combines the features of both deterministic and stochastic models. The model not only utilizes currently-known information but also anticipates for the future. Through a final computer simulation, we are able to demonstrate the advantage of the mixed model.