Grouping in decomposition method for multi-item capacitated lot-sizing problem with immediate lost sales and joint and item-dependent setup cost

M. Narenji, S.M.T. Fatemi Ghomi and S.V.R. Nooraie

International Journal of Systems Science, 2011, vol. 42, issue 3, 489-498

Abstract: This article examines a dynamic and discrete multi-item capacitated lot-sizing problem in a completely deterministic production or procurement environment with limited production/procurement capacity where lost sales (the loss of customer demand) are permitted. There is no inventory space capacity and the production activity incurs a fixed charge linear cost function. Similarly, the inventory holding cost and the cost of lost demand are both associated with a linear no-fixed charge function. For the sake of simplicity, a unit of each item is assumed to consume one unit of production/procurement capacity. We analyse a different version of setup costs incurred by a production or procurement activity in a given period of the planning horizon. In this version, called the joint and item-dependent setup cost, an additional item-dependent setup cost is incurred separately for each produced or ordered item on top of the joint setup cost.

Date: 2011
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DOI: 10.1080/00207720903579013

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