The capacitated Lot Sizing model: A powerful tool for logistics decision making

Abstract

Starting from the seminal intuitions that led to the developments of the Economic Order Quantity model and of the formulation of the Dynamic Lot Sizing Problem, inventory models have been widely employed in the academic literature and in corporate practice to solve a wide range of theoretical and real-world problems, as, through simple modifications to the original models, it is possible to accommodate and describe a broad set of situations taking place in complex supply chains and logistics systems.The aim of this paper is to highlight, once more, the powerfulness of these seminal contributions by showing how the mathematical formulation of the Capacitated Lot Sizing Problem can be easily adapted to solve some further practical logistics applications (mainly arising in the field of coordination of transportation services) not strictly related to manufacturing and production environment. Mathematical formulations and computational experiences will be provided to support these statements.