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1、Chapter6ApplicationstoProductionandInventoryApplicationsofoptimizationmethodstoproductionandinventoryprob•lemsdatebackatleasttotheclassicalEOQ(EcononiicOrderQuantity)modelorthelotsizeformulaofHarris(1913).TheEOQisessentiallyastaticmodelinthesensethatthedemandisconstantandonlyasta•
2、tionarysolutionissought.AdynamicversionofthelotsizemodelwasanalyzedbyWagnerandWhitin(1958).Thesolutionmethodologyusedtherewasdynamicprogramming.AnimportantdynamicproductionplanningmodelwasdevelopedbyHolt,Modigliani,Muth,andSimon(1960).Intheirmodel,referredtoastheHMMSmodel,theycons
3、ideredbothproductioncostsandinventoryholdingcostsovertime.Theyusedcalculusofvariationstechniquestosolvethecontinuous-timeversionoftheirmodel.InSection6.1,amodelofThompsonandSethi(1980),similartotheHMMSmodel,isformulatedandcompletelysolvedusingoptimalcontroltheory.Theturnpikesoluti
4、onisalsoobtainedwhenthehorizonisinfinite.InSection6.2,thecontinuouswheattradingmodelofIjiriandThompson(1970)isintroduced.Inthismodelawheatspeculatormustbuyandsellwheatinanoptimalwayinordertotakeadvantageofchangesinthepriceofwheatovertime.Thismodelpermitsshort-sellingofwheat.Themod
5、elhasbeenfurtheranalyzedbyNorstrom(1978)withshort-sellingdisallowed.AsimpleexamplewhichillustrateshisresiiltsispresentedinSection6.2.4.InSection6.3,weintroduceawarehousingconstraint,i.e.,anupper1546.ApplicationstoProductionAndInventoryboundontheamountofwheatthatcanbestored,inthewh
6、eattradingmodel.InadditiontobeingreaUstic,theintroductionofthewarehousingconstrainthelpsustoillustratetheconceptsofdecisionandforecasthorizonsbymeansofexamples.Thissectionisexpositoryinnature,buttheoreticaldevelopmentsoftheseideasareavailableintheliterature.6.1AProduction-Inventor
7、ySystemManymanufacturingenterprisesuseaproduction-inventorysystemtomanagefluctuationsinconsumerdemandfortheproduct.Suchasystemconsistsofamanufacturingplantandafinishedgoodswarehousetostorethoseproductswhicharemanufacturedbutnotimmediatelysold.Onceaproductismadeandputintoinventory,
8、itincursinventoryholdingcostsoftw