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Solving the capacitated lot-sizing problem with backorder consideration

Author

Listed:
  • C H Cheng

    (The Chinese University of Hong Kong)

  • M S Madan

    (University of Wisconsin at Whitewater)

  • Y Gupta

    (University of Washington at Seattle)

  • S So

    (Hong Kong Hospital Authority)

Abstract

In this research, we formulate and solve a type of the capacitated lot-sizing problem. We present a general model for the lot-sizing problem with backorder options, that can take into consideration various types of production capacities such as regular time, overtime and subcontracting. The objective is to determine lot sizes that will minimize the sum of setup costs, holding cost, backorder cost, regular time production costs, and overtime production costs, subject to resource constraints. Most existing formulations for the problem consider the special case of the problem where a single source of production capacity is considered. However, allowing for the use of alternate capacities such as overtime is quite common in many manufacturing settings. Hence, we provide a formulation that includes consideration of multiple sources of production capacity. We develop a heuristic based on the special structure of fixed charge transportation problem. The performance of our algorithm is evaluated by comparing the heuristic solution value to lower bound value. Extensive computational results are presented.

Suggested Citation

  • C H Cheng & M S Madan & Y Gupta & S So, 2001. "Solving the capacitated lot-sizing problem with backorder consideration," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 52(8), pages 952-959, August.
    • Handle: RePEc:pal:jorsoc:v:52:y:2001:i:8:d:10.1057_palgrave.jors.2601166
    DOI: 10.1057/palgrave.jors.2601166
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    Cited by:

    1. Hüseyin Güden & Haldun Süral, 2017. "A polynomial algorithm for the earthwork allocation problem with borrow and waste site selection," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 68(9), pages 1085-1093, September.
    2. 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.
    3. Yongjian Li & Jian Chen & Xiaoqiang Cai, 2007. "An integrated staff-sizing approach considering feasibility of scheduling decision," Annals of Operations Research, Springer, vol. 155(1), pages 361-390, November.

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