IDEAS home Printed from https://ideas.repec.org/a/eee/jomega/v131y2025ics0305048324001488.html
   My bibliography  Save this article

An integrated approach for lot-sizing and storage assignment

Author

Listed:
  • Melega, Gislaine Mara
  • Xu, Chi
  • Jans, Raf
  • Paquette, Julie

Abstract

In this paper, we study the interaction between the lot-sizing problem and the storage assignment problem. Traditional lot-sizing problems have been studied for decades. However, only recent studies have further considered decisions related to the assignment of items to inventory locations, aiming to better model the complex reality. In our problem, the storage space is divided into several separate locations, and the inventory is assigned to the storage locations taking into account specific compatibility conditions. Relocation of inventory is also possible if needed. In addition to the traditional cost elements from the lot-sizing problem, we consider others related to holding inventory, such as fixed storage costs, handling costs, and relocation costs. We model the problem using a general mathematical model, as well as a transportation reformulation, which provides better lower bounds. We propose several heuristics to solve the problem by splitting it into smaller subproblems, which are then solved sequentially. A series of computational experiments is carried out in order to evaluate the impact of the integration between the lot-sizing and the storage assignment decisions, as well as the behavior of the different solution approaches. The results show that the proposed heuristics are highly effective in finding feasible solutions that are very close to the best solutions, while spending 97% less computational time compared to solving the full mathematical model. When compared to the relax-and-fix heuristic (benchmark), certain versions of the heuristics can find better solutions using less computational effort, underscoring the benefit of employing more specialized heuristics. Additionally, we conduct a sensitivity analysis with the aim of understanding the impact of key input parameters on the problem. The results indicate a significant influence of compatibility levels on the problem complexity. Limited item–item compatibility notably increases complexity, whereas restricted item–location compatibility reduces computational time.

Suggested Citation

  • Melega, Gislaine Mara & Xu, Chi & Jans, Raf & Paquette, Julie, 2025. "An integrated approach for lot-sizing and storage assignment," Omega, Elsevier, vol. 131(C).
    • Handle: RePEc:eee:jomega:v:131:y:2025:i:c:s0305048324001488
    DOI: 10.1016/j.omega.2024.103183
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0305048324001488
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.omega.2024.103183?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Hark-Chin Hwang & Wilco van den Heuvel & Albert P. M. Wagelmans, 2023. "Multilevel Lot-Sizing with Inventory Bounds," INFORMS Journal on Computing, INFORMS, vol. 35(6), pages 1470-1490, November.
    2. Christopher Suerie & Hartmut Stadtler, 2003. "The Capacitated Lot-Sizing Problem with Linked Lot Sizes," Management Science, INFORMS, vol. 49(8), pages 1039-1054, August.
    3. Robinson, Powell & Narayanan, Arunachalam & Sahin, Funda, 2009. "Coordinated deterministic dynamic demand lot-sizing problem: A review of models and algorithms," Omega, Elsevier, vol. 37(1), pages 3-15, February.
    4. Silva, Eduardo M. & Melega, Gislaine M. & Akartunalı, Kerem & de Araujo, Silvio A., 2023. "Formulations and theoretical analysis of the one-dimensional multi-period cutting stock problem with setup cost," European Journal of Operational Research, Elsevier, vol. 304(2), pages 443-460.
    5. Diego Fiorotto & Silvio Araujo, 2014. "Reformulation and a Lagrangian heuristic for lot sizing problem on parallel machines," Annals of Operations Research, Springer, vol. 217(1), pages 213-231, June.
    6. Hark‐Chin Hwang & Wilco van den Heuvel, 2012. "Improved algorithms for a lot‐sizing problem with inventory bounds and backlogging," Naval Research Logistics (NRL), John Wiley & Sons, vol. 59(3‐4), pages 244-253, April.
    7. Oliveira, Washington A. & Fiorotto, Diego J. & Song, Xiang & Jones, Dylan F., 2021. "An extended goal programming model for the multiobjective integrated lot-sizing and cutting stock problem," European Journal of Operational Research, Elsevier, vol. 295(3), pages 996-1007.
    8. Zhang, Guoqing & Nishi, Tatsushi & Turner, Sarina D.O. & Oga, Keisuke & Li, Xindan, 2017. "An integrated strategy for a production planning and warehouse layout problem: Modeling and solution approaches," Omega, Elsevier, vol. 68(C), pages 85-94.
    9. M Denizel & H Süral, 2006. "On alternative mixed integer programming formulations and LP-based heuristics for lot-sizing with setup times," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 57(4), pages 389-399, April.
    10. Karina Copil & Martin Wörbelauer & Herbert Meyr & Horst Tempelmeier, 2017. "Simultaneous lotsizing and scheduling problems: a classification and review of models," OR Spectrum: Quantitative Approaches in Management, Springer;Gesellschaft für Operations Research e.V., vol. 39(1), pages 1-64, January.
    11. Lee, Younsoo & Lee, Kyungsik, 2020. "Lot-sizing and scheduling in flat-panel display manufacturing process," Omega, Elsevier, vol. 93(C).
    12. Rohaninejad, Mohammad & Hanzálek, Zdeněk, 2023. "Multi-level lot-sizing and job shop scheduling with lot-streaming: Reformulation and solution approaches," International Journal of Production Economics, Elsevier, vol. 263(C).
    13. Guan, Yongpei & Liu, Tieming, 2010. "Stochastic lot-sizing problem with inventory-bounds and constant order-capacities," European Journal of Operational Research, Elsevier, vol. 207(3), pages 1398-1409, December.
    14. Gurkan, M. Edib & Tunc, Huseyin & Tarim, S. Armagan, 2022. "The joint stochastic lot sizing and pricing problem," Omega, Elsevier, vol. 108(C).
    15. Zhanwei Tian & Guoqing Zhang, 2021. "Multi-echelon fulfillment warehouse rent and production allocation for online direct selling," Annals of Operations Research, Springer, vol. 304(1), pages 427-451, September.
    16. Sereshti, Narges & Adulyasak, Yossiri & Jans, Raf, 2024. "Managing flexibility in stochastic multi-level lot sizing problem with service level constraints," Omega, Elsevier, vol. 122(C).
    17. Lanza, Giacomo & Passacantando, Mauro & Scutellà, Maria Grazia, 2022. "Assigning and sequencing storage locations under a two level storage policy: Optimization model and matheuristic approaches," Omega, Elsevier, vol. 108(C).
    18. WOLSEY, Lurence A., 2006. "Lot-sizing with production and delivery time windows," LIDAM Reprints CORE 1844, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    19. Absi, Nabil & van den Heuvel, Wilco, 2019. "Worst case analysis of Relax and Fix heuristics for lot-sizing problems," European Journal of Operational Research, Elsevier, vol. 279(2), pages 449-458.
    20. Jing, Fuying & Chao, Xiangrui, 2022. "Forecast horizons for a two-echelon dynamic lot-sizing problem," Omega, Elsevier, vol. 110(C).
    21. Suzanne, Elodie & Absi, Nabil & Borodin, Valeria & van den Heuvel, Wilco, 2020. "A single-item lot-sizing problem with a by-product and inventory capacities," European Journal of Operational Research, Elsevier, vol. 287(3), pages 844-855.
    22. Sereshti, Narges & Adulyasak, Yossiri & Jans, Raf, 2021. "The value of aggregate service levels in stochastic lot sizing problems," Omega, Elsevier, vol. 102(C).
    23. AkartunalI, Kerem & Miller, Andrew J., 2009. "A heuristic approach for big bucket multi-level production planning problems," European Journal of Operational Research, Elsevier, vol. 193(2), pages 396-411, March.
    24. Fan, Jie & Ou, Jinwen, 2023. "On dynamic lot sizing with bounded inventory for a perishable product," Omega, Elsevier, vol. 119(C).
    25. Glock, C. H. & Grosse, E. H. & Ries, J. M., 2014. "The Lot Sizing Problem: A Tertiary Study," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 63361, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    26. Zhang, Guoqing & Shang, Xiaoting & Alawneh, Fawzat & Yang, Yiqin & Nishi, Tatsushi, 2021. "Integrated production planning and warehouse storage assignment problem: An IoT assisted case," International Journal of Production Economics, Elsevier, vol. 234(C).
    27. Cunha, Artur Lovato & Santos, Maristela Oliveira & Morabito, Reinaldo & Barbosa-Póvoa, Ana, 2018. "An integrated approach for production lot sizing and raw material purchasing," European Journal of Operational Research, Elsevier, vol. 269(3), pages 923-938.
    28. Harvey M. Wagner & Thomson M. Whitin, 1958. "Dynamic Version of the Economic Lot Size Model," Management Science, INFORMS, vol. 5(1), pages 89-96, October.
    29. de Koster, Rene & Le-Duc, Tho & Roodbergen, Kees Jan, 2007. "Design and control of warehouse order picking: A literature review," European Journal of Operational Research, Elsevier, vol. 182(2), pages 481-501, October.
    30. Helber, Stefan & Sahling, Florian, 2010. "A fix-and-optimize approach for the multi-level capacitated lot sizing problem," International Journal of Production Economics, Elsevier, vol. 123(2), pages 247-256, February.
    31. Stadtler, Hartmut, 1996. "Mixed integer programming model formulations for dynamic multi-item multi-level capacitated lotsizing," European Journal of Operational Research, Elsevier, vol. 94(3), pages 561-581, November.
    32. Stadtler, Hartmut, 2003. "Multilevel lot sizing with setup times and multiple constrained resources: Internally rolling schedules with lot-sizing windows," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 20204, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    33. Jaruphongsa, Wikrom & Cetinkaya, Sila & Lee, Chung-Yee, 2004. "Warehouse space capacity and delivery time window considerations in dynamic lot-sizing for a simple supply chain," International Journal of Production Economics, Elsevier, vol. 92(2), pages 169-180, November.
    34. Minner, Stefan, 2009. "A comparison of simple heuristics for multi-product dynamic demand lot-sizing with limited warehouse capacity," International Journal of Production Economics, Elsevier, vol. 118(1), pages 305-310, March.
    35. Jing, Fuying & Chao, Xiangrui, 2021. "A dynamic lot size model with perishable inventory and stockout," Omega, Elsevier, vol. 103(C).
    36. Rafael A. Melo & Celso C. Ribeiro, 2017. "Formulations and heuristics for the multi-item uncapacitated lot-sizing problem with inventory bounds," International Journal of Production Research, Taylor & Francis Journals, vol. 55(2), pages 576-592, January.
    37. Ye Shi & Xiaolong Guo & Yugang Yu, 2018. "Dynamic warehouse size planning with demand forecast and contract flexibility," International Journal of Production Research, Taylor & Francis Journals, vol. 56(3), pages 1313-1325, February.
    38. Stephen F. Love, 1973. "Bounded Production and Inventory Models with Piecewise Concave Costs," Management Science, INFORMS, vol. 20(3), pages 313-318, November.
    39. Ayse Akbalik & Bernard Penz & Christophe Rapine, 2015. "Capacitated lot sizing problems with inventory bounds," Annals of Operations Research, Springer, vol. 229(1), pages 1-18, June.
    40. Wu, Tao & Shi, Leyuan & Geunes, Joseph & AkartunalI, Kerem, 2011. "An optimization framework for solving capacitated multi-level lot-sizing problems with backlogging," European Journal of Operational Research, Elsevier, vol. 214(2), pages 428-441, October.
    41. Suerie, Christopher & Stadtler, Hartmut, 2003. "The Capacitated lot-sizing problem with linked lot sizes," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 20206, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    42. Brahimi, Nadjib & Dauzere-Peres, Stephane & Najid, Najib M. & Nordli, Atle, 2006. "Single item lot sizing problems," European Journal of Operational Research, Elsevier, vol. 168(1), pages 1-16, January.
    43. Süral, Haldun & Denizel, Meltem & Van Wassenhove, Luk N., 2009. "Lagrangean relaxation based heuristics for lot sizing with setup times," European Journal of Operational Research, Elsevier, vol. 194(1), pages 51-63, April.
    44. Cesar Ramirez & Alvaro Luiz Neuenfeldt Júnior & Julio Cezar Siluk & Lucas De Ataíde, 2022. "A literature overview about warehouse management," International Journal of Logistics Systems and Management, Inderscience Enterprises Ltd, vol. 42(2), pages 153-175.
    45. Li, Yuchen & Liu, Ming & Saldanha-da-Gama, Francisco & Yang, Zaoli, 2024. "Risk-averse two-stage stochastic programming for assembly line reconfiguration with dynamic lot sizes," Omega, Elsevier, vol. 127(C).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Brahimi, Nadjib & Absi, Nabil & Dauzère-Pérès, Stéphane & Nordli, Atle, 2017. "Single-item dynamic lot-sizing problems: An updated survey," European Journal of Operational Research, Elsevier, vol. 263(3), pages 838-863.
    2. Wei, Mingyuan & Qi, Mingyao & Wu, Tao & Zhang, Canrong, 2019. "Distance and matching-induced search algorithm for the multi-level lot-sizing problem with substitutable bill of materials," European Journal of Operational Research, Elsevier, vol. 277(2), pages 521-541.
    3. Melega, Gislaine Mara & de Araujo, Silvio Alexandre & Jans, Raf, 2018. "Classification and literature review of integrated lot-sizing and cutting stock problems," European Journal of Operational Research, Elsevier, vol. 271(1), pages 1-19.
    4. Ayse Akbalik & Bernard Penz & Christophe Rapine, 2015. "Capacitated lot sizing problems with inventory bounds," Annals of Operations Research, Springer, vol. 229(1), pages 1-18, June.
    5. Zhang, Guoqing & Shang, Xiaoting & Alawneh, Fawzat & Yang, Yiqin & Nishi, Tatsushi, 2021. "Integrated production planning and warehouse storage assignment problem: An IoT assisted case," International Journal of Production Economics, Elsevier, vol. 234(C).
    6. Helber, Stefan & Sahling, Florian, 2010. "A fix-and-optimize approach for the multi-level capacitated lot sizing problem," International Journal of Production Economics, Elsevier, vol. 123(2), pages 247-256, February.
    7. José M. Gutiérrez & Beatriz Abdul-Jalbar & Joaquín Sicilia & Inmaculada Rodríguez-Martín, 2021. "Effective Algorithms for the Economic Lot-Sizing Problem with Bounded Inventory and Linear Fixed-Charge Cost Structure," Mathematics, MDPI, vol. 9(6), pages 1-21, March.
    8. Sahling, Florian & Buschkühl, Lisbeth & Tempelmeier, Horst & Helber, Stefan, 2008. "Solving a Multi-Level Capacitated Lot Sizing Problem with Multi-Period Setup Carry-Over via a Fix-and-Optimize Heuristic," Hannover Economic Papers (HEP) dp-400, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
    9. Sereshti, Narges & Adulyasak, Yossiri & Jans, Raf, 2024. "Managing flexibility in stochastic multi-level lot sizing problem with service level constraints," Omega, Elsevier, vol. 122(C).
    10. Silvio Alexandre de Araujo & Bert De Reyck & Zeger Degraeve & Ioannis Fragkos & Raf Jans, 2015. "Period Decompositions for the Capacitated Lot Sizing Problem with Setup Times," INFORMS Journal on Computing, INFORMS, vol. 27(3), pages 431-448, August.
    11. Chen, Haoxun, 2015. "Fix-and-optimize and variable neighborhood search approaches for multi-level capacitated lot sizing problems," Omega, Elsevier, vol. 56(C), pages 25-36.
    12. Jans, R.F. & Degraeve, Z., 2005. "Modeling Industrial Lot Sizing Problems: A Review," ERIM Report Series Research in Management ERS-2005-049-LIS, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    13. Boutarfa, Y. & Senoussi, A. & Brahimi, N. & Aouam, T., 2024. "Integration and substitution in hybrid manufacturing and refurbishing systems," International Journal of Production Economics, Elsevier, vol. 274(C).
    14. Tao Wu & Leyuan Shi & Jie Song, 2012. "An MIP-based interval heuristic for the capacitated multi-level lot-sizing problem with setup times," Annals of Operations Research, Springer, vol. 196(1), pages 635-650, July.
    15. Hadi Farhangi, 2021. "Multi-Echelon Supply Chains with Lead Times and Uncertain Demands," SN Operations Research Forum, Springer, vol. 2(3), pages 1-25, September.
    16. Hwang, Hark-Chin & Jaruphongsa, Wikrom, 2008. "Dynamic lot-sizing model for major and minor demands," European Journal of Operational Research, Elsevier, vol. 184(2), pages 711-724, January.
    17. Sahling, Florian & Hahn, Gerd J., 2019. "Dynamic lot sizing in biopharmaceutical manufacturing," International Journal of Production Economics, Elsevier, vol. 207(C), pages 96-106.
    18. Jing, Fuying & Chao, Xiangrui, 2022. "Forecast horizons for a two-echelon dynamic lot-sizing problem," Omega, Elsevier, vol. 110(C).
    19. Lee, Younsoo & Lee, Kyungsik, 2022. "New integer optimization models and an approximate dynamic programming algorithm for the lot-sizing and scheduling problem with sequence-dependent setups," European Journal of Operational Research, Elsevier, vol. 302(1), pages 230-243.
    20. Absi, Nabil & van den Heuvel, Wilco, 2019. "Worst case analysis of Relax and Fix heuristics for lot-sizing problems," European Journal of Operational Research, Elsevier, vol. 279(2), pages 449-458.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jomega:v:131:y:2025:i:c:s0305048324001488. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/375/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.