Technical Note—Error Noted in “Order-Based Cost Optimization in Assemble-to-Order Systems” by Lu and Song (2005)
Published Online:18 Jan 2019https://doi.org/10.1287/opre.2018.1789
Abstract
One of the main results of “Order-Based Cost Optimization in Assemble-to-Order Systems” [Lu Y, Song J-S (2005) Order-based cost optimization in assemble-to-order systems. Oper. Res. 53(1):151–169] is proposition 1(c), which states that the cost function of an assemble-to-order inventory system satisfies a discrete convexity property called L♮-convexity. We construct a counterexample showing that this result is incorrect, and hence their proposed steepest decent algorithm may not work.
