The Part-period Balancing algorithm and its Look Ahead-Look Back feature: A theoretical and experimental analysis of a single stage lot-sizing procedure

A simple adjustment to the Part-period Balancing (PPB) algorithm is analytically derived under the assumptions of a constant demand rate and an infinite planning horizon. The adjustment leads to an optimal behaviour for the PPB heuristic under the stated hroizon. Subsequent experimental analysis through simulation of lot-sizing performance in environments with time-varying, discrete demand shows that the proposed adjustment leads to significant cost reductions. This paper also analyses the Look Ahead-Look Back tests which is the distinguishing feature between the PPB procedure and the Least Total Cost algorithm. In the last portion of the paper, the cost effectiveness of the Look Ahead-Look Back tests is confirmed through simulation. That is, when used together with the original PPB procedure, they lead to an improved cost performance.