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Stochastic lot sizing problem with nervousness considerations

Koca, Esra and Yaman, Hande and Aktürk, M. Selim (2018) Stochastic lot sizing problem with nervousness considerations. Computers and Operations Research, 94 . pp. 23-37. ISSN 0305-0548 (Print) 1873-765X (Online)

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Official URL: http://dx.doi.org/10.1016/j.cor.2018.01.021

Abstract

In this paper, we consider the multistage stochastic lot sizing problem with controllable processing times under nervousness considerations. We assume that the processing times can be reduced in return for extra cost (compression cost). We generalize the static and static-dynamic uncertainty strategies to eliminate setup oriented nervousness and control quantity oriented nervousness. We restrict the quantity oriented nervousness by introducing a new concept called promised production amounts, and considering new range constraints and a nervousness cost function. We formulate the problem as a second-order cone mixed integer program (SOCMIP), and apply the conic strengthening. We observe the continuous mixing set substructure in our formulation that arises due the controllable processing times. We reformulate the problem by using an extended formulation for the continuous mixing set and solve the problem by a branch-and-cut approach. The computational experiments indicate that our solution method can solve larger instances in less computation times than the off-the-shelf solver. Moreover, in our computational experiments we investigate the impact of new restrictions, specifically the additional cost of eliminating the setup oriented nervousness, on the total costs and the system nervousness. Our computational results clearly indicate that we could significantly reduce the nervousness costs and generate more stable production schedules with a relatively small increase in the total cost.

Item Type:Article
Uncontrolled Keywords:Stochastic lot sizing problem; Controllable processing times; Nervousness; Continuous mixing set
Subjects:T Technology > TS Manufactures > TS0155-194 Production management. Operations management
ID Code:36551
Deposited By:Esra Koca
Deposited On:06 Sep 2018 15:16
Last Modified:06 Sep 2018 15:16

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