An Extended Mixed-Integer Programming Formulation and Dynamic Cut Generation Approach for the Stochastic Lot-Sizing Problem

TUNÇ H. , KILIC O. A. , Tarim S. A. , Rossi R.

INFORMS JOURNAL ON COMPUTING, cilt.30, ss.492-506, 2018 (SCI İndekslerine Giren Dergi) identifier identifier

  • Cilt numarası: 30 Konu: 3
  • Basım Tarihi: 2018
  • Doi Numarası: 10.1287/ijoc.2017.0792
  • Sayfa Sayıları: ss.492-506


We present an extended mixed-integer programming formulation of the stochastic lot-sizing problem for the static-dynamic uncertainty strategy. The proposed formulation is significantly more time efficient as compared to existing formulations in the literature and it can handle variants of the stochastic lot-sizing problem characterized by penalty costs and service level constraints, as well as backorders and lost sales. Also, besides being capable of working with a predefined piecewise linear approximation of the cost function-as is the case in earlier formulations-it has the functionality of finding an optimal cost solution with an arbitrary level of precision by means of a novel dynamic cut generation approach.