IDEAS home Printed from https://ideas.repec.org/a/gam/jmathe/v8y2020i6p878-d365725.html
   My bibliography  Save this article

A New Formulation for the Capacitated Lot Sizing Problem with Batch Ordering Allowing Shortages

Author

Listed:
  • Yajaira Cardona-Valdés

    (Centro de Investigación en Matemáticas Aplicadas, Universidad Autónoma de Coahuila, Blvd. V. Carranza s/n. Col. República Oriente, Saltillo C.P. 25280, Coahuila, Mexico
    These authors contributed equally to this work.)

  • Samuel Nucamendi-Guillén

    (Facultad de Ingeniería, Universidad Panamericana, Álvaro del Portillo 49, Zapopan, Jalisco 45010, Mexico
    These authors contributed equally to this work.)

  • Rodrigo E. Peimbert-García

    (School of Engineering and Sciences, Tecnológico de Monterrey, Eugenio Garza Sada 2501 Sur, Monterrey, Nuevo León 64849, Mexico
    These authors contributed equally to this work.
    Current address: School of Engineering, Macquarie University. Balaclava Road, North Ryde, Sydney 2109, Australia.)

  • Gustavo Macedo-Barragán

    (Facultad de Ingeniería, Universidad Panamericana, Álvaro del Portillo 49, Zapopan, Jalisco 45010, Mexico
    These authors contributed equally to this work.)

  • Eduardo Díaz-Medina

    (Facultad de Ingeniería, Universidad Panamericana, Álvaro del Portillo 49, Zapopan, Jalisco 45010, Mexico
    These authors contributed equally to this work.)

Abstract

This paper addresses the multi-product, multi-period capacitated lot sizing problem. In particular, this work determines the optimal lot size allowing for shortages (imposed by budget restrictions), but with a penalty cost. The developed models are well suited to the usually rather inflexible production resources found in retail industries. Two models are proposed based on mixed-integer formulations: (i) one that allows shortage and (ii) one that forces fulfilling the demand. Both models are implemented over test instances and a case study of a real industry. By investigating the properties of the obtained solutions, we can determine whether the shortage allowance will benefit the company. The experimental results indicate that, for the test instances, the fact of allowing shortages produces savings up to 17% in comparison with the model without shortages, whereas concerning the current situation of the company, these savings represent 33% of the total costs while preserving the revenue.

Suggested Citation

  • Yajaira Cardona-Valdés & Samuel Nucamendi-Guillén & Rodrigo E. Peimbert-García & Gustavo Macedo-Barragán & Eduardo Díaz-Medina, 2020. "A New Formulation for the Capacitated Lot Sizing Problem with Batch Ordering Allowing Shortages," Mathematics, MDPI, vol. 8(6), pages 1-16, June.
  • Handle: RePEc:gam:jmathe:v:8:y:2020:i:6:p:878-:d:365725
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2227-7390/8/6/878/pdf
    Download Restriction: no

    File URL: https://www.mdpi.com/2227-7390/8/6/878/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Ferreira, Deisemara & Clark, Alistair R. & Almada-Lobo, Bernardo & Morabito, Reinaldo, 2012. "Single-stage formulations for synchronised two-stage lot sizing and scheduling in soft drink production," International Journal of Production Economics, Elsevier, vol. 136(2), pages 255-265.
    2. Akbalik, Ayse & Hadj-Alouane, Atidel B. & Sauer, Nathalie & Ghribi, Houcem, 2017. "NP-hard and polynomial cases for the single-item lot sizing problem with batch ordering under capacity reservation contract," European Journal of Operational Research, Elsevier, vol. 257(2), pages 483-493.
    3. Liao, Jui-Jung & Huang, Kuo-Nan & Chung, Kun-Jen, 2012. "Lot-sizing decisions for deteriorating items with two warehouses under an order-size-dependent trade credit," International Journal of Production Economics, Elsevier, vol. 137(1), pages 102-115.
    4. 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.
    5. Wen-Lian Hsu, 1983. "On the General Feasibility Test of Scheduling Lot Sizes for Several Products on One Machine," Management Science, INFORMS, vol. 29(1), pages 93-105, January.
    6. HSU, Wen-Lian, 1983. "On the general feasibility test of scheduling lot sizes for several products on one machine," LIDAM Reprints CORE 515, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    7. Uday S. Karmarkar, 1987. "Lot Sizes, Lead Times and In-Process Inventories," Management Science, INFORMS, vol. 33(3), pages 409-418, March.
    8. 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.
    9. Minner, Stefan, 2003. "Multiple-supplier inventory models in supply chain management: A review," International Journal of Production Economics, Elsevier, vol. 81(1), pages 265-279, January.
    10. Fan, Jie & Wang, Guoqing, 2018. "Joint optimization of dynamic lot and warehouse sizing problems," European Journal of Operational Research, Elsevier, vol. 267(3), pages 849-854.
    11. Yang, Yi & Yuan, Quan & Xue, Weili & Zhou, Yun, 2014. "Analysis of batch ordering inventory models with setup cost and capacity constraint," International Journal of Production Economics, Elsevier, vol. 155(C), pages 340-350.
    12. Bruno, Giuseppe & Genovese, Andrea & Piccolo, Carmela, 2014. "The capacitated Lot Sizing model: A powerful tool for logistics decision making," International Journal of Production Economics, Elsevier, vol. 155(C), pages 380-390.
    13. Kuik, Roelof & Salomon, Marc & van Wassenhove, Luk N., 1994. "Batching decisions: structure and models," European Journal of Operational Research, Elsevier, vol. 75(2), pages 243-263, June.
    14. Na Liu & Shuyun Ren & Tsan-Ming Choi & Chi-Leung Hui & Sau-Fun Ng, 2013. "Sales Forecasting for Fashion Retailing Service Industry: A Review," Mathematical Problems in Engineering, Hindawi, vol. 2013, pages 1-9, November.
    15. Hariga, Moncer & Ben-Daya, Mohamed, 1999. "Some stochastic inventory models with deterministic variable lead time," European Journal of Operational Research, Elsevier, vol. 113(1), pages 42-51, February.
    16. Drexl, A. & Kimms, A., 1997. "Lot sizing and scheduling -- Survey and extensions," European Journal of Operational Research, Elsevier, vol. 99(2), pages 221-235, June.
    17. Nicole DeHoratius & Adam J. Mersereau & Linus Schrage, 2008. "Retail Inventory Management When Records Are Inaccurate," Manufacturing & Service Operations Management, INFORMS, vol. 10(2), pages 257-277, November.
    18. Rezaei, Jafar & Davoodi, Mansoor, 2011. "Multi-objective models for lot-sizing with supplier selection," International Journal of Production Economics, Elsevier, vol. 130(1), pages 77-86, March.
    19. Karimi, B. & Fatemi Ghomi, S. M. T. & Wilson, J. M., 2003. "The capacitated lot sizing problem: a review of models and algorithms," Omega, Elsevier, vol. 31(5), pages 365-378, October.
    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. Bruno, Giuseppe & Genovese, Andrea & Piccolo, Carmela, 2014. "The capacitated Lot Sizing model: A powerful tool for logistics decision making," International Journal of Production Economics, Elsevier, vol. 155(C), pages 380-390.
    2. 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.
    3. Wolter, Anja & Helber, Stefan, 2013. "Simultaneous Production and Maintenance Planning for a Single Capacitated Resource facing both a Dynamic Demand and Intensive Wear and Tear," Hannover Economic Papers (HEP) dp-522, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
    4. 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.
    5. 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.
    6. Rossi, Tommaso & Pozzi, Rossella & Testa, Mariapaola, 2017. "EOQ-based inventory management in single-machine multi-item systems," Omega, Elsevier, vol. 71(C), pages 106-113.
    7. 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.
    8. Ferreira, Deisemara & Clark, Alistair R. & Almada-Lobo, Bernardo & Morabito, Reinaldo, 2012. "Single-stage formulations for synchronised two-stage lot sizing and scheduling in soft drink production," International Journal of Production Economics, Elsevier, vol. 136(2), pages 255-265.
    9. Carvalho, Desiree M. & Nascimento, Mariá C.V., 2022. "Hybrid matheuristics to solve the integrated lot sizing and scheduling problem on parallel machines with sequence-dependent and non-triangular setup," European Journal of Operational Research, Elsevier, vol. 296(1), pages 158-173.
    10. Vidal-Carreras, Pilar I. & Garcia-Sabater, Jose P. & Coronado-Hernandez, Jairo R., 2012. "Economic lot scheduling with deliberated and controlled coproduction," European Journal of Operational Research, Elsevier, vol. 219(2), pages 396-404.
    11. 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.
    12. Toledo, Franklina Maria Bragion & Armentano, Vinicius Amaral, 2006. "A Lagrangian-based heuristic for the capacitated lot-sizing problem in parallel machines," European Journal of Operational Research, Elsevier, vol. 175(2), pages 1070-1083, December.
    13. Gislaine Mara Melega & Silvio Alexandre de Araujo & Reinaldo Morabito, 2020. "Mathematical model and solution approaches for integrated lot-sizing, scheduling and cutting stock problems," Annals of Operations Research, Springer, vol. 295(2), pages 695-736, December.
    14. Bollapragada, Ramesh & Croce, Federico Della & Ghirardi, Marco, 2011. "Discrete-time, economic lot scheduling problem on multiple, non-identical production lines," European Journal of Operational Research, Elsevier, vol. 215(1), pages 89-96, November.
    15. Wagner, Michael & Smits, Sanne R., 2004. "A local search algorithm for the optimization of the stochastic economic lot scheduling problem," International Journal of Production Economics, Elsevier, vol. 90(3), pages 391-402, August.
    16. Daniel Quadt & Heinrich Kuhn, 2009. "Capacitated lot‐sizing and scheduling with parallel machines, back‐orders, and setup carry‐over," Naval Research Logistics (NRL), John Wiley & Sons, vol. 56(4), pages 366-384, June.
    17. Sônia Poltroniere & Kelly Poldi & Franklina Toledo & Marcos Arenales, 2008. "A coupling cutting stock-lot sizing problem in the paper industry," Annals of Operations Research, Springer, vol. 157(1), pages 91-104, January.
    18. Altendorfer, Klaus, 2015. "Influence of lot size and planned lead time on service level and inventory for a single-stage production system with advance demand information and random required lead times," International Journal of Production Economics, Elsevier, vol. 170(PB), pages 478-488.
    19. Sahling, Florian & Hahn, Gerd J., 2019. "Dynamic lot sizing in biopharmaceutical manufacturing," International Journal of Production Economics, Elsevier, vol. 207(C), pages 96-106.
    20. 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.

    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:gam:jmathe:v:8:y:2020:i:6:p:878-:d:365725. 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: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    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.