A Note on an Economic Lot-sizing Problem with Perishable Inventory and Economies of Scale Costs: Approximation Solutions and Worst Case Analysis

This paper presents an economic lot-sizing problem with perishable inventory and general economies of scale cost functions. For the case with backlogging allowed, a mathematical model is formulated, and several properties of the optimal solutions are explored. With the help of these optimality properties, a polynomial time approximation algorithm is developed by a new method. The new method adopts a shift technique to obtain a feasible solution of subproblem and takes the optimal solution of the subproblem as an approximation solution of our problem. The worst case performance for the approximation algorithm is proven to be (42 + 5)/7. Finally, an instance illustrates that the bound is tight.