EXTENSIONS OF THE PLANNING HORIZON THEOREM IN THE DYNAMIC LOT SIZE MODEL.

This paper considers an N period production planning problem in which a sequence of known demands d[sub 1], d[sub 2], ···, d[sub N] must be satisfied. The cost of production in period t consists of a setup cost K[sub i] plus a marginal cost per unit c[sub t]. The cost of carrying a unit of inventory into period t is h[sup t-1]. An optimal policy is a production plan that satisfies demand st minimum cost. The main results of the paper are a theorem that decreases the computational effort required to find optimal policies and a theorem that establishes the existence of planning horizons. The results of these two theorems are combined in a forward algorithm for the efficient solution of the problem. [ABSTRACT FROM AUTHOR]