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Multi-item capacitated lot-sizing problems with setup times and pricing decisions
Authors
Dantzig
Dantzig
+15 more
Degraeve
Dzielinski
Geunes
Geunes
Gilbert
Gilbert
Hindi
Kunreuther
Lasdon
Manne
Thomas
Trigeiro
van den Heuvel
Wagelmans
Wagner
Publication date
1 March 2010
Publisher
'Wiley'
Doi
Cite
Abstract
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
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