Multi-level lotsizing and scheduling by batch sequencing

We consider a single-machine scheduling problem with a multi-level product structure. Setups are required if the machine changes production from one product type to another, and the scheduling decision must satisfy dynamic demand. We propose a lotsizing as well as a scheduling model, and we compare solution procedures for both models on a very restricted set of instances. As a result the multi-level structure complicates the inventory balance constraints in the lotsizing model. In the scheduling model, however, the multi-level structure translates into precedence constraints between jobs (leading to a smaller search space) which allows it to solve the scheduling model to optimality.