This paper discusses an approach to solve the joint replenishment problem in a production environment with variable production cost. These variable production costs occur due to economies of scale in production. Under this environment, the model leads to a global optimization problem, which is investigated by using some standard results from convex analysis. Consequently, an effective and exact solution procedure is proposed. The proposed procedure is guaranteed to return a solution with a predetermined quality in terms of the objective function value. A computational study is provided to illustrate the performance of the proposed solution procedure with respect to the running time.

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European Journal of Operational Research
Erasmus Research Institute of Management

Bayindir, Z.P, Birbil, S.I, & Frenk, J.B.G. (2006). The joint replenishment problem with variable production costs. European Journal of Operational Research, 175(1), 622–640. doi:10.1016/j.ejor.2005.06.005