A capacitated lot sizing problem with stochastic setup times and overtime

Duygu Taş, Michel Gendreau, Ola Jabali and Raf Jans

European Journal of Operational Research, 2019, vol. 273, issue 1, 146-159

Abstract: In this paper, we study a Capacitated Lot Sizing Problem with Stochastic Setup Times and Overtime (CLSP-SSTO). We describe a mathematical model that considers both regular costs (including production, setup and inventory holding costs) and expected overtime costs (related to the excess usage of capacity). The CLSP-SSTO is formulated as a two-stage stochastic programming problem. A procedure is proposed to exactly compute the expected overtime for a given setup and production plan when the setup times follow a Gamma distribution. A sample average approximation procedure is applied to obtain upper bounds and a statistical lower bound. This is then used to benchmark the performance of two additional heuristics. A first heuristic is based on changing the capacity in the deterministic counterpart, while the second heuristic artificially modifies the setup time. We conduct our computational experiments on well-known problem instances and provide comprehensive analyses to evaluate the performance of each heuristic.

Keywords: Production; Lot sizing; Stochastic setup times; Sample average approximation; Heuristics (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:273:y:2019:i:1:p:146-159

DOI: 10.1016/j.ejor.2018.07.032

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