A simple heuristic for multi-product dynamic lot sizing problems

Abstract

In a multi-product dynamic lot sizing problem, besides a separate minor setup cost for each product produced, a major setup cost is incurred when at least one product is produced in a period. The objective is to determine the product lot sizes, over a finite planning horizon, that will minimize the total relevant cost. A simple extension of the one-way-eyeballing-heuristic (OWEH) to a multi-product algorithm is given. Computational experience on realistically sized problems (30 products, 50 time periods) show inefficiency is about 10% of the optimum. © 1997 Elsevier Science Ltd.