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A heuristic algorithm for determining lot sizes of an item subject to regular and overtime production capacities
Author(s) -
Dixon Paul S.,
Elder Mark D.,
Rand Graham K.,
Silver Edward A.
Publication year - 1983
Publication title -
journal of operations management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 3.649
H-Index - 191
eISSN - 1873-1317
pISSN - 0272-6963
DOI - 10.1016/0272-6963(83)90016-5
Subject(s) - overtime , sizing , production (economics) , heuristic , computer science , operations research , mathematical optimization , set (abstract data type) , holding cost , operations management , economics , mathematics , microeconomics , labour economics , art , programming language , visual arts
The problem considered in this paper deals with the sizing and timing of replenishments for an item facing a time‐varying, but known, pattern of requirements. Regular time and overtime (the latter at a cost premium) production options are available where there are production capacities that also can vary with time. The problem is to establish the pattern of replenishments so as to keep the total of setup, carrying and overtime premium costs as low as possible without any backlogging of demand and without violating any of the capacity constraints. A heuristic procedure, simple enough to implement manually, is developed and tested on a large representative set of problems. The resulting performance is excellent, namely an average cost penalty of only 0.5%.