Multilevel Lot-Sizing with Inventory Bounds

Hark-Chin Hwang (), Wilco van den Heuvel () and Albert P. M. Wagelmans ()
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Hark-Chin Hwang: School of Management, Kyung Hee University, Seoul 130-701, Republic of Korea
Wilco van den Heuvel: Econometric Institute, Erasmus University Rotterdam, 3062 Rotterdam, Netherlands
Albert P. M. Wagelmans: Econometric Institute, Erasmus University Rotterdam, 3062 Rotterdam, Netherlands

INFORMS Journal on Computing, 2023, vol. 35, issue 6, 1470-1490

Abstract: We consider a single-item multilevel lot-sizing problem with a serial structure where one of the levels has an inventory capacity (the bottleneck level). We propose a novel dynamic programming algorithm combining Zangwill’s approach for the uncapacitated problem and the basis-path approach for the production capacitated problem. Under reasonable assumptions on the cost parameters the time complexity of the algorithm is O ( L T 6 ) with L the number of levels in the supply chain and T the length of the planning horizon. Computational tests show that our algorithm is significantly faster than the commercial solver C plex applied to a standard formulation and can solve reasonably sized instances up to 48 periods and 12 levels in a few minutes.

Keywords: inventory bound; multilevel lot-sizing; dynamic programming; inventory-production: deterministic (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:inm:orijoc:v:35:y:2023:i:6:p:1470-1490

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