Dynamic cost allocation for economic lot sizing games |
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Institution: | 1. H. Milton Stewart School of Industrial and Systems Engineering, Georgia Institute of Technology, Atlanta, GA 30332, United States;2. Mathematics Department, United States Naval Academy, Annapolis, MD 21402, United States |
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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. |
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Keywords: | Cooperative game Economic lot sizing Dynamic allocation |
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