A Lagrangian relaxation based approach for the capacitated lot sizing problem in closed-loop supply chain

A Lagrangian relaxation based approach for the capacitated lot sizing problem in closed-loop supply chain

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Article ID: iaor20125154
Volume: 140
Issue: 1
Start Page Number: 249
End Page Number: 255
Publication Date: Nov 2012
Journal: International Journal of Production Economics
Authors: , ,
Keywords: combinatorial optimization
Abstract:

This paper investigates the capacitated lot sizing problem in closed‐loop supply chain considering setup costs, product returns, and remanufacturing. We formulate the problem as a mixed integer program and propose a Lagrangian relaxation‐based solution approach. The resulting Lagrangian subproblems are then solved by polynomial time algorithms. Compared to existing solution methods in the literature, our Lagrangian relaxation based approach is advantageous in that it naturally provides a lower bound on the optimal objective function value, which allows us to assess the quality of solutions found. Numerical experiments using synthesized data demonstrate that our approach can find quality solutions efficiently.

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