A LAGRANGEAN RELAXATION APPROACH FOR MULTI PRODUCT, MULTI ECHELON SYSTEMS WITH CAPACITATED DYNAMIC LOTSIZING

This paper focuses on multi-echelon inventory systems having an arborescent structure. In the structure each intermediate facility has exactly one predecessor and possibly several successors. All inventory costs are assumed linear- with ordering cost that is independent of the order quantity for each stocking point. The model takes account of dynamic cost structure and dynamic demand pattern as well as capacity limitations. The paper exploits a mixed bivalent programming model to determine what inventory levels, if anv, should be maintained at the various stocking paints in order to minimise total inventory cost of the entire system. A computationally efficient Lagrangean relaxation-based procedure is developed to decompose the model into submodels by each stocking point and product.

Anahtar Kelimeler:

Inventory, Integer Programming, Modelling, Production

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