Deterministic and stochastic profit maximization versions of the economic lot scheduling problem with pricing considerations

Abstract

The economic lot scheduling problem (ELSP) is a well known problem that focuses on scheduling the production of multiple items on a single machine such that inventory and setup costs are minimized. In this thesis the ELSP is extended to include price optimization with the objective to maximize profits. Two variants are proposed: a deterministic version which will be known as the PELSP and the stochastic version which is called the SPLSP. A solution methodology based on column generation and integer programming is proposed and is shown to produce very close to optimal results with short solution times. Computational testing is performed to evaluate the methodology. The results are discussed and recommendations for further research are provided.