The linear dynamic lot size problem with minimum order quantities

This paper continues the analysis of a special uncapacitated single item lot sizing problem where a minimum order quantity restriction, instead of the setup cost, guarantees a certain level of production lots. A detailed analysis of the model and an investigation of the particularities of the cumulative demand structure allowed us to develop a solution algorithm based on the concept of minimal sub-problems. We present an optimal solution to a minimal sub-problem in an explicit form and prove that it serves as a construction block for the optimal solution of the initial problem. The computational tests and the comparison with the published algorithm confirm the efficiency of the solution algorithm developed here. --lot sizing problem,minimum order quantity,dynamic programming

Multi-item capacitated lot-sizing problems with setup times and pricing decisions

We study a multi-item capacitated lot-sizing problem with setup times and pricing (CLSTP) over a finite and discrete planning horizon. In this class of problems, the demand for each independent item in each time period is affected by pricing decisions. The corresponding demands are then satisfied through production in a single capacitated facility or from inventory, and the goal is to set prices and determine a production plan that maximizes total profit. In contrast with many traditional lot-sizing problems with fixed demands, we cannot, without loss of generality, restrict ourselves to instances without initial inventories, which greatly complicates the analysis of the CLSTP. We develop two alternative Dantzig–Wolfe decomposition formulations of the problem, and propose to solve their relaxations using column generation and the overall problem using branch-and-price. The associated pricing problem is studied under both dynamic and static pricing strategies. Through a computational study, we analyze both the efficacy of our algorithms and the benefits of allowing item prices to vary over time. © 2009 Wiley Periodicals, Inc. Naval Research Logistics, 2010Peer Reviewedhttp://deepblue.lib.umich.edu/bitstream/2027.42/65027/1/20394_ftp.pd

An optimization framework for solving capacitated multi-level lot-sizing problems with backlogging

This paper proposes two new mixed integer programming models for capacitated multi-level lot-sizing problems with backlogging, whose linear programming relaxations provide good lower bounds on the optimal solution value. We show that both of these strong formulations yield the same lower bounds. In addition to these theoretical results, we propose a new, effective optimization framework that achieves high quality solutions in reasonable computational time. Computational results show that the proposed optimization framework is superior to other well-known approaches on several important performance dimensions

Lot-sizing with stock upper bounds and fixed charges

Here we study the discrete lot-sizing problem with an initial stock variable and an associated variable upper bound constraint. This problem is of interest in its own right, and is also a natural relaxation of the constant capacity lot-sizing problem with upper bounds and fixed charges on the stock variables. We show that the convex hull of solutions of the discrete lot-sizing problem is obtained as the intersection of two simpler sets, one involving just 0-1 variables and the second a mixing set with a variable upper bound constraint. For these two sets we derive both inequality descriptions and polynomial-size extended formulations of their respective convex hulls. Finally we carry out some limited computational tests on single-item constant capacity lot-sizing problems with upper bounds and fixed charges on the stock variables in which we use the extended formulations derived above to strengthen the initial mixed integer programming formulations.mixed integer programming, discrete lot-sizing, stock fixed costs, mixing sets

Minimizing costs is easier than minimizing peaks when supplying the heat demand of a group of houses

This paper studies planning problems for a group of heating systems which supply the hot water demand for domestic use in houses. These systems (e.g. gas or electric boilers, heat pumps or microCHPs) use an external energy source to heat up water and store this hot water for supplying the domestic demands. The latter allows to some extent a decoupling of the heat production from the heat demand. We focus on the situation where each heating system has its own demand and buffer and the supply of the heating systems is coming from a common source. In practice, the common source may lead to a coupling of the planning for the group of heating systems. On the one hand, the external supply of the energy for heating up the water may have to be bought by an energy supplier on e.g. a day-ahead market. As the price of energy varies over time on such markets, this supplier is interested in a planning which minimizes the total cost to supply the heating systems with energy. On the other hand, the bottleneck to supply the energy also may be the capacity of the distribution system (e.g. the electricity networks or the gas network). As this has to be dimensioned for the maximal consumption, in this case it is important to minimize the maximal peak. The two mentioned coupling constraints for supplying the energy for producing the heat, lead to two different objectives for the planning of the group of heating systems: minimizing cost and minimizing the maximal peak. In this paper, we study the algorithmic complexity of the two resulting planning problems. For minimizing costs, a classical dynamic programming approach is given which solves the problem in polynomial time. On the other hand, we prove that minimizing the maximal peak is NP-hard and discuss why this problem is hard. Based on this, we show that this problem becomes polynomial if all heating systems have the same consumption of energy when turned on. Finally, we present a Fix Parameter Tractable (FPT) algorithm for minimizing the maximal peak which is linear in the number of time intervals