Dynamic lot sizing for a warm/cold process: Heuristics and insights

Ayhan Özgür Toy and Emre Berk

International Journal of Production Economics, 2013, vol. 145, issue 1, 53-66

Abstract: We consider the dynamic lot sizing problem for a warm/cold process where the process can be kept warm at a unit variable cost for the next period if more than a prespecified quantity has been produced. Exploiting the optimal production plan structures, we develop nine rule-based forward solution heuristics. Proposed heuristics are modified counterparts of the heuristics developed previously for the classical dynamic lot sizing problem. In a numerical study, we investigate the performance of the proposed heuristics and identify operating environment characteristics where each particular heuristic is the best or among the best. Moreover, for a warm/cold process setting, our numerical studies indicate that, when used on a rolling horizon basis, a heuristic may also perform better costwise than a solution obtained using a dynamic programming approach.

Keywords: Lot sizing; Warm/cold process; Rolling horizon; Heuristics (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:proeco:v:145:y:2013:i:1:p:53-66

DOI: 10.1016/j.ijpe.2012.09.006

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