Lot Sizing Problem with Equipment Replacement
by
Višnja Vojvodić Rosenzweig
Faculty of Economics, University of Zagreb
Coauthors: Kristina Šorić (Faculty of Economics, University of Zagreb)

Each of N products is to be processed on a single machine in order to satisfy known demands in each of T periods. The object is to minimize the sum of the costs of production, storage and set up. This problem is known as a Production Lot Sizing Problem.

On the other hand, an Equipment Replacement Problem concerns a machine which deteriorates with age and the decision to replace it. We assume that we must own such a machine during each of T periods and that the utility of operating a machine for one period is a known quantity and depends on the age of the machine. The object is to decide when to replace the machine in order to maximize the utility of operating it.

Combining these two problems, we define a new multicriteria mixed 0-1 integer programming problem called Lot Sizing Problem with Equipment Replacement. The object is to minimize the costs and maximize the utility of operating the machine. This paper studies the properties of efficient point set for this new problem.

Date received: March 15, 2000

Copyright © 2000 by the author(s). The author(s) of this document and the organizers of the conference have granted their consent to include this abstract in Atlas Conferences Inc. Document # caex-22.