An Integrated Replenishment and Transportation Model : Computational Performance Assessment

Abstract

Transformation processes with multiple inputs typically exhibit nonlinearities in their output with respect to input usages. They have been traditionally modeled via production functions in the microeconomics literature (Heathfield and Wibe, 1987). One of the most common production functions is the Cobb–Douglas (C–D) production function. This production function assumes that multiple (n) inputs (also called factors or resources) are needed for output, Q, and they may be substituted to take advantage of the marginal cost differentials. In general, it has the form Q A x i i n i , = ⎣ ⎤ ⎦ ( )