Optimization Online


Dynamic Cost Allocation for Economic Lot Sizing Games

Alejandro Toriello (atoriello***at***isye.gatech.edu)
Nelson A Uhan (uhan***at***usna.edu)

Abstract: We consider a cooperative game defined by an economic lot sizing problem with concave ordering costs over a finite time horizon, in which each player faces demand for a single product in each period and coalitions can pool orders. We show how to compute a dynamic cost allocation in the strong sequential core of this game, i.e. an allocation over time that exactly distributes costs and is stable against coalitional defections at every period of the time horizon.

Keywords: lot sizing, cooperative game, dynamic allocation

Category 1: Applications -- OR and Management Sciences (Production and Logistics )

Category 2: Other Topics (Game Theory )

Citation: Published in Operations Research Letters. DOI: 10.1016/j.orl.2013.12.005


Entry Submitted: 11/06/2013
Entry Accepted: 11/06/2013
Entry Last Modified: 07/21/2016

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