A heuristic for the dynamic multi-level capacitated lotsizing problem with linked lotsizes for general product structures

In this paper, a new model formulation for the dynamic multi–level capacitated lotsizing problem with linked lotsizes is introduced. Linked lotsizes means that the model formulation correctly accounts for setup carryovers between adjacent periods if production of a product is continued in the next period. This model formulation is a good compromise between the big–bucket and small–bucket model formulation in that it inherits the stability of a big–bucket model and at least partially includes the precise description of setup operations provided by a small–bucket model. A Lagrangean heuristic is developed and tested in a numerical experiment with a set of invented data and a data set taken from industry. The solutions found show a good quality.