A Polynomial TimeAlgorithm forCoordination ofPricing and LotSizing ModelwithBacklogging

Indecentralized policy, lotsizing models withbacklogging (LSP-B) tendtoneglect theeffects of market onproduction. Inthis paper, pricing isintroduced intogeneral LSP-Bandbycoordinating pricing and LSP-B, therational price canbesetsuchthat thefirm's profit ismaximized. Demandisadeterministic function ofprice. Itisprimarily concerned that thesameselling price onaproduct ismaintained throughout horizon. An exact algorithm isdeveloped tosolve joint fixed pricing andLSP-Binpolynomial time. Thealgorithm isbased onalternate decisions onpricing andproduction. By restarting thealternate decisions repeatedly, theoptimal pricing andcorresponding production plancanbesolved recursively. Results showthatthejoint policy may contribute moreprofit tothefirmthanthedecentralized