A heuristic for purchasing of sheet metal decisions based on mathematical programming

An operational research project at the Oskarshamn plant of Saab Scania AB Truckdivision Sweden is reported. The decision problem concerns the product mix of sheet metal purchased. A mathematical model that approximates the real-world problem is derived, the solution of which includes a p-median problem. This optimization problem is solved using Lagrangean relaxation and a subgradient optimization procedure. Numerical results for problems of real-world size and structure are reported and indicate satisfactory efficiency.