Restrictive aggregation of items in multi-stage production systems

The paper considers the aggregation of groups of similar items for a general multi-stage lot-size scheduling problem in the presence of nonzero initial stocks and variable safety stock levels. It is assumed that significant setups occur only when changing production from one family of similar items to another. An aggregated scheduling model is constructed, the optimal solution of which can be transformed into a feasible, near-optimal solution of the original problem.