OPTIMAL SCHEDULING OF PURCHASING ORDERS FOR LARGE PROJECTS

In this paper we generalize the newsboy model to optimize the scheduli ng of purchasing orders for large projects. The timely completion of a typical project hinges upon receiving all the purchased components by the time they are scheduled to be used. We show how to minimize the t otal expected cost of the project, including lateness penalty cost and holding costs. The main contribution of the paper is in solving the p roblem for more than one component while considering the interdependen cies that exist among them. We outline an analytic solution and presen t fast heuristics.