dynamic demand, coordinated lot-size problem New formulation and computational testing for the capacitated

Production lot-sizing problems are one of the most widely researched areas in operations management. In the coordinated replenishment lot size problem, a major setup cost is incurred each time one or more items in a product family are jointly produced, and a minor setup cost is associated with each item replenished. The capacitated, dynamic demand version of the problem assumes the products share a single capacity constrained resource, and deterministic demand that may vary over time. The objective is to satisfy all customer demand at minimum total cost. Component costs include those for major and minor setups, and inventory holding costs. This paper presents a new problem formulation for the capacitated dynamic demand coordinated replenishment problem and investigates the formulation's mathematical properties. The results of an extensive computational study provide insight into the formulation's integrality properties, the quality of the lower bound provided by solving the linear programming relaxation, and computation requirements for solving the problem with an LP based branch and bound procedure.

New formulation and computational testing for the capacitated, dynamic demand, coordinated lot-size problem Conference Paper