The dynamic lot-sizing problem with convex economic production costs and setups

Tools

Kian, R. ORCID: 0000-0001-8786-6349, Gürler, Ü. and Berk, E., 2014. The dynamic lot-sizing problem with convex economic production costs and setups. International Journal of Production Economics, 155, pp. 361-379. ISSN 0925-5273

Preview

Text
11157_Kian.pdf - Published version
Download (973kB) | Preview

Official URL: http://doi.org/10.1016/j.ijpe.2014.02.006

Abstract

In this work the uncapacitated dynamic lot-sizing problem is considered. Demands are deterministic and production costs consist of convex costs that arise from economic production functions plus set-up costs. We formulate the problem as a mixed integer, non-linear programming problem and obtain structural results which are used to construct a forward dynamic-programming algorithm that obtains the optimal solution in polynomial time. For positive setup costs, the generic approaches are found to be prohibitively time-consuming; therefore we focus on approximate solution methods. The forward DP algorithm is modified via the conjunctive use of three rules for solution generation. Additionally, we propose six heuristics. Two of these are single-stepSilver–Meal and EOQ heuristics for the classical lot-sizing problem. The third is a variant of the Wagner–Whitin algorithm. The remaining three heuristics are two-step hybrids that improve on the initial solutions of the first three by exploiting the structural properties of optimal production subplans. The proposed algorithms are evaluated by an extensive numerical study. The two-step Wagner–Whitin algorithm turns out to be the best heuristic.

Item Type:

Journal article

Publication Title:

International Journal of Production Economics

Creators:

Kian, R., Gürler, Ü. and Berk, E.

Publisher:

Elsevier B.V.

Date:

September 2014

Volume:

155