Integration of a Heuristic Method into an ERP Software: A Successful Experience for a Dynamic Multi-item Lot Sizing Problem

José M. Gutiérrez (), Marcos Colebrook (), Cristian Rivero () and Teresa Pestana ()
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José M. Gutiérrez: Universidad de La Laguna
Marcos Colebrook: Universidad de La Laguna
Cristian Rivero: Urban Science
Teresa Pestana: ITOP MC

A chapter in Advanced Business Analytics, 2015, pp 21-37 from Springer

Abstract: Abstract This chapter focuses on the successful collaboration between a research team at the Universidad de La Laguna (Tenerife, Spain) and the firm ITOP Management Consulting, which is a SAP partner mainly interested in developing solutions for SMEs. Company representatives came to our group to propose us both the design of an efficient algorithm to reduce inventory costs in companies, and its eventual integration as an add-on in SAP Business One platform. The problem arises in those firms with storage capacity that should schedule the replenishment orders for several items along a finite planning horizon. After 2 years, the algorithm was finally implemented in C# and .NET. A comprehensive computational experiment was carried out considering a wide range of random instances. The experimental results revealed that heuristic solutions were on average 5 % above the best solution provided by CPLEX optimizer.

Keywords: Mixed Integer Programming; Inventory Level; Order Quantity; Setup Cost; Final Inventory (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-319-11415-6_2

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DOI: 10.1007/978-3-319-11415-6_2

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