Capacitated Lot Sizing with Setup Times

William W. Trigeiro, John O. McClain

Management Science · 1989 · 454 citations · 23 references

Concepts

TL;DR

The study addresses the Capacitated Lot Sizing Problem on a single machine with time‑varying costs, demands, and setup times. The research investigates how setup time influences lot‑sizing decisions. A Lagrangian relaxation decomposes the problem into uncapacitated single‑product lot‑sizing subproblems solved by dynamic programming, with dual costs updated via subgradient optimization, and a heuristic smoothing procedure generates feasible production plans without overtime. The algorithm successfully solves problems with setup time or cost, but tightly binding capacity constraints pose greater difficulty; solutions without overtime are not always attainable, and surprisingly larger problems are easier to solve despite higher computational effort, indicating capacity tightness as a key difficulty indicator.

Abstract

This research focuses on the effect of setup time on lot sizing. The setting is the Capacitated Lot Sizing Problem (the single-machine lot sizing problem) with nonstationary costs, demands, and setup times. A Lagrangian relaxation of the capacity constraints of CLSP allows it to be decomposed into a set of uncapacitated single product lot sizing problems. The Lagrangian dual costs are updated by subgradient optimization, and the single-item problems are solved by dynamic programming. A heuristic smoothing procedure constructs feasible solutions (production plans) which do not require overtime. The algorithm solves problems with setup time or setup cost. Problems with extremely tightly binding capacity constraints were much more difficult to solve than anticipated. Solutions without overtime could not always be found for them. The most significant results are that (1) the tightness of the capacity constraint is a good indicator of problem difficulty for problems with setup time; and (2) the algorithm solves larger problems better than smaller problems, although they are more time consuming to solve. This indicates that larger problems may be easier despite the greater computational effort they require.

References

23