Multi-item production lot sizing using a search simulation approach

The selection of appropriate lot sizes for a number of items sharing common manufacturing facilities is a complex problem. Simple approaches such as the Economic Order Quantity model are not generally suitable in such an environment with its variable and stochastic demands and lead times, and with complex interactions between the different products and resources of the system. This paper presents an approach to the multi-item production lot sizing problem based on the use of simulation to model the interactions occurring in the system. A search algorithm is used to adjust the lot sizes on the basis of the results of previous simulation runs, with the objective of achieving a minimum total cost solution.