The economic lot scheduling problem with finite backorder costs

We are concerned with the problem of scheduling m items, facing constant demand rates, on a single facility to minimize the long‐run average holding, backorder, and setup costs. The inventory holding and backlogging costs are charged at a linear time weighted rate. We develop a lower bound on the cost of all feasible schedules and extend recent developments in the economic lot scheduling problem, via time‐varying lot sizes, to find optimal or near‐optimal cyclic schedules. The resulting schedules are used elsewhere as target schedules when demands are random. © 1992 John Wiley & Sons, Inc.