Simultaneous lotsizing and scheduling by combining local search with dual reoptimization

The contribution of this paper is twofold. On the one hand, the particular problem of integrating lotsizing and scheduling of several products on a single, capacitated production line is modelled and solved, taking into account sequence-dependent setup times. Thereby, continuous lotsizes, meeting deterministic dynamic demands, are to be determined and scheduled with the objective of minimizing inventory holding costs and sequence-dependent setup costs. On the other hand, a new general algorithmic approach is presented: A dual reoptimization algorithm is combined with a local search heuristic for solving a mixed integer programming problem. This idea is applied to the above lotsizing and scheduling problem by embedding a dual network flow algorithm into threshold accepting and simulated annealing, respectively. Computational tests show the effectiveness of the new solution method.