Multiple lot-sizing decisions in a two-stage production with an interrupted geometric yield and non-rigid demand

Wu M-C (), Huang L-C, Hsu H-M and Su T-S
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Wu M-C: National Chiao Tung University
Huang L-C: National Chiao Tung University
Hsu H-M: National Chiao Tung University
Su T-S: National Chiao Tung University

Journal of the Operational Research Society, 2011, vol. 62, issue 6, 1075-1084

Abstract: Abstract In a production system with random yield, it may be more cost effective to release lots multiple times towards fulfilling a customer order. Such a decision, called the multiple lot-sizing problem, has been investigated in various contexts. This paper proposes an efficient algorithm for solving a new multiple lot-sizing problem defined in the context of a two-stage production system with non-rigid demand when its process yields are governed by interrupted geometric distributions. We formulate this problem as a dynamic program (DP) and develop lemmas to solve it. However, solving such a DP may be computationally extensive, particularly for large-scale cases with a high yield. Therefore, this study proposes an efficient algorithm for resolving computational issues. This algorithm is designed to reduce the DP network into a much simpler algorithm by combining a group of DP branches into a single one. Extensive experiments were carried out. Results indicate that the proposed reduction algorithm is quite helpful for practitioners dealing with large-scale cases characterized by high-yield.

Keywords: lot-sizing; interrupted geometric distribution; dynamic programming; two-stage system; production/inventory system (search for similar items in EconPapers)
Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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DOI: 10.1057/jors.2010.39

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