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The effect of economies-of-scale on the performance of lot-sizing heuristics in rolling horizon basis

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  • Ramez Kian
  • Emre Berk
  • Ülkü Gürler
  • Hassan Rezazadeh
  • Baback Yazdani

Abstract

In this article, we consider the production planning problem in the presence of (dis)economies-of-scale in production costs on a rolling horizon basis with a fixed forecast horizon. We propose variants of three well-known and commonly used heuristics (Wagner–Whitin, Silver–Meal and Least Unit Cost) adapted for this particular setting. In an extensive numerical study with demands exhibiting stationary, increasing and decreasing trends and seasonality, we demonstrate that having longer forecast horizon is less effective in obtaining more cost effective production plans when the production cost function is convex and also when fixed setup cost is lower, which both are proxy to lack of economies-of-scale.

Suggested Citation

  • Ramez Kian & Emre Berk & Ülkü Gürler & Hassan Rezazadeh & Baback Yazdani, 2021. "The effect of economies-of-scale on the performance of lot-sizing heuristics in rolling horizon basis," International Journal of Production Research, Taylor & Francis Journals, vol. 59(8), pages 2294-2308, April.
  • Handle: RePEc:taf:tprsxx:v:59:y:2021:i:8:p:2294-2308
    DOI: 10.1080/00207543.2020.1730464
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    Cited by:

    1. Palmié, Maximilian & Parida, Vinit & Mader, Anna & Wincent, Joakim, 2023. "Clarifying the scaling concept: A review, definition, and measure of scaling performance and an elaborate agenda for future research," Journal of Business Research, Elsevier, vol. 158(C).

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