Efficient, effective lot sizing for multistage production systems

Efficient, effective lot sizing for multistage production systems

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Article ID: iaor199488
Country: United States
Volume: 41
Issue: 2
Start Page Number: 371
End Page Number: 385
Publication Date: Mar 1993
Journal: Operations Research
Authors:
Keywords: inventory, heuristics
Abstract:

The paper considers a multistage, multiproduct production/inventory system in discrete time. When an order is placed for a component it is instantly delivered, and the required amounts of the components consumed in producing the given component are simultaneously withdrawn from their respective inventories. External demand occurs for a single component. The paper assumes that the external demand for the component is nonconstant, deterministic, and must be met without backlogging. It proposes two new cluster-based heuristics for this problem. The paper will show that the first of these heuristics has a worst-case relative cost that is between 1.44 and 2, and the second of these heuristics has a worst-case relative cost of 2. Computational tests indicate that, on the average, these heuristics are within 0.7% and 1.3% of optimal, respectively, and that their performance is very insensitive to the size of the system and to other input parameters.

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