Rounding heuristics for multiple product dynamic lot-sizing in the presence of queueing behavior

Abstract

We present heuristics for solving a difficult nonlinear integer programming (NIP) model arising from a multi-item single machine dynamic lot-sizing problem. The heuristic obtains a local optimum for the continuous relaxation of the NIP model and rounds the resulting fractional solution to a feasible integer solution by solving a series of shortest path problems. We also implement two benchmarks: a version of the well-known Feasibility Pump heuristic and the Surrogate Method developed for stochastic discrete optimization problems. Computational experiments reveal that our shortest path based rounding procedure finds better production plans than the previously developed myopic heuristic and the benchmarks.