An alternative modeling for lot-sizing and scheduling problem with a decomposition based heuristic algorithm

In this paper, we consider a new lot-sizing and scheduling problem (LSSP) that minimizes the sum of production cost, setup cost and inventory cost. Setup carry-over and overlapping as well as demand splitting are considered. Also, maximum number of setups for each time period is not limited. For this LSSP, we have formulated a mixed integer programming (MIP) model, of which the size does not increase even if we divide a time period into a number of micro time periods. Also, we have developed an efficient heuristic algorithm by combining decomposition scheme with local search procedure. Test results show that the developed heuristic algorithm finds good quality (in practice, even better) feasible solutions using far less computation time compared with the CPLEX, a competitive MIP solver.