Solving a Multi-Level Capacitated Lot Sizing Problem with Multi-Period Setup Carry-Over via a Fix-and-Optimize Heuristic

Florian Sahling, Lisbeth Buschkühl, Horst Tempelmeier and Stefan Helber ()

Hannover Economic Papers (HEP) from Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät

Abstract: This paper presents a new algorithm for the dynamic Multi-Level Capacitated Lot Sizing Problem with Setup Carry-Overs (MLCLSP-L). The MLCLSP-L is a big-bucket model that allows the production of any number of products within a period, but it incorporates partial sequencing of the production orders in the sense that the first and the last product produced in a period are determined by the model. We solve a model which is applicable to general bill-of-material structures and which includes minimum lead times of one period and multi-period setup carry-overs. Our algorithm solves a series of mixed-integer linear programs in an iterative so-called Fix-and-Optimize approach. In each instance of these mixed-integer linear programs a large number of binary setup variables is fixed whereas only a small subset of these variables is optimized, together with the complete set of the inventory and lot size variables. A numerical study shows that the algorithm provides high-quality results and that the computational effort is moderate.

Keywords: Lot Sizing; MIP; Decomposition; MLCLSP-L; Fix-and-Optimize heuristic. (search for similar items in EconPapers)
JEL-codes: C61 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2008-06
New Economics Papers: this item is included in nep-cmp
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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