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Multiple lot-sizing decisions in a two-stage production with an interrupted geometric yield and non-rigid demand

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  • M-C Wu

    (National Chiao Tung University)

  • L-C Huang

    (National Chiao Tung University)

  • H-M Hsu

    (National Chiao Tung University)

  • T-S Su

    (National Chiao Tung University)

Abstract

In a production system with random yield, it may be more cost effective to release lots multiple times towards fulfilling a customer order. Such a decision, called the multiple lot-sizing problem, has been investigated in various contexts. This paper proposes an efficient algorithm for solving a new multiple lot-sizing problem defined in the context of a two-stage production system with non-rigid demand when its process yields are governed by interrupted geometric distributions. We formulate this problem as a dynamic program (DP) and develop lemmas to solve it. However, solving such a DP may be computationally extensive, particularly for large-scale cases with a high yield. Therefore, this study proposes an efficient algorithm for resolving computational issues. This algorithm is designed to reduce the DP network into a much simpler algorithm by combining a group of DP branches into a single one. Extensive experiments were carried out. Results indicate that the proposed reduction algorithm is quite helpful for practitioners dealing with large-scale cases characterized by high-yield.

Suggested Citation

  • M-C Wu & L-C Huang & H-M Hsu & T-S Su, 2011. "Multiple lot-sizing decisions in a two-stage production with an interrupted geometric yield and non-rigid demand," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 62(6), pages 1075-1084, June.
    • Handle: RePEc:pal:jorsoc:v:62:y:2011:i:6:d:10.1057_jors.2010.39
    DOI: 10.1057/jors.2010.39
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    References listed on IDEAS

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    3. Stefan Helber & Karl Inderfurth & Florian Sahling & Katja Schimmelpfeng, 2018. "Flexible versus robust lot-scheduling subject to random production yield and deterministic dynamic demand," IISE Transactions, Taylor & Francis Journals, vol. 50(3), pages 217-229, March.

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