A multi-family dynamic lot sizing problem with coordinated replenishments: a heuristic procedure

Consider a manufacturing environment where multiple items are produced. These products are grouped into families due to their similarities in design and manufacturing. It pays off to coordinate the manufacture of products in a given family because preparing the facility for producing a family of products involves a major family setup. In addition each individual product in a given family may require a relatively minor setup. The objective is to determine the product lot sizes, over a finite planning horizon, that will minimize the total relevant cost, subject to demand and capacity constraints. In this paper we present an effective heuristic procedure for this problem. Computational results for the heuristic procedure are also reported. Our computational experience leads us to conclude that the heuristic procedure may be of considerable value as a decision making aid to production planners in a real-world setting.