Production planning and inventories optimization with a general storage cost function

Tharaoui, Rabah; Chazal, Marie; Jouini, Elyès

Tharaoui, Rabah; Chazal, Marie; Jouini, Elyès (2003), Production planning and inventories optimization with a general storage cost function, Nonlinear Analysis: Theory, Methods & Applications, 54, 8, p. 1365– 1395. http://dx.doi.org/10.1016/S0362-546X(03)00191-3

Type

Article accepté pour publication ou publié

Date

2003

Journal name

Nonlinear Analysis: Theory, Methods & Applications

Volume

Number

Publisher

Elsevier

Pages

1365– 1395

Abstract (EN)

We study the deterministic optimization problem of a profit-maximizing firm which plans its sales/production schedule. The Firm knows the revenue associated to a given level of sales, as well as its production and storage costs. The revenue and the production cost are assumed to be, respectively, concave and convex whereas the cost of storage has no particular properties of convexity. First, in spite of this non-convexity, we give an existence result. Second, from the necessary conditions, we derive some precise qualitative description of the optimal plan. In particular, we obtain that inventory accumulation is not optimal.

Subjects / Keywords

Production Planning; Inventory Management; Storage Costs; Non-Convex Optimization; Calculus of Variations

JEL

D24 - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
O21 - Planning Models; Planning Policy