Article ID: | iaor20122192 |
Volume: | 136 |
Issue: | 2 |
Start Page Number: | 275 |
End Page Number: | 286 |
Publication Date: | Apr 2012 |
Journal: | International Journal of Production Economics |
Authors: | Osman Hany, Demirli Kudret |
Keywords: | scheduling, programming: integer, programming: nonlinear |
The economic lot and delivery scheduling problem for a multi‐stage supply chain comprising multiple items is studied in this paper. It is required to develop a synchronized replenishment strategy, and specify the sequence of production and the replenishment cycle time that achieves synchronization through the supply chain at minimum cost. The problem is presented in a novel formulation based on the quadratic assignment representation. The common cycle time and the integer multipliers policies are adopted to accomplish the desired synchronization. The two policies are represented by nonlinear models handled through a hybrid algorithm. The algorithm combines linearization, outer approximation and Benders decomposition techniques. Results of the two policies demonstrate that a cost reduction up to16.3% can be attained by employing the integer multipliers policy instead of the common cycle time. Computational experiments show the efficiency of the new formulation and solution algorithm by reaching the optimal solution for large problem instances in short time.