Reducing a Lot Sizing Problem with Set up, Production, Shortage and Inventory Costs to Lot Sizing Problem with Set up, Production and Inventory Costs

We reduce lot sizing problem with (a) Set Up, Production, Shortage and Inventory Costs to lot sizing problem with (b) Set Up, Production, and Inventory Costs. For lot sizing problem (as in (b)), Pochet and Wolsey [1] have given already integral polyhedral with polynomial separation where a linear program yield “integer” solutions. Thus problem (b) which we have created can be more easily solved by methods available in literature. Also with the removal of shortage variables is an additional computational advantage.