An efficient computational method for a stochastic dynamic lot-sizing problem under service-level constraints

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TARIM Ş. A., Dogru M. K., Oezen U., Rossi R.

EUROPEAN JOURNAL OF OPERATIONAL RESEARCH, vol.215, no.3, pp.563-571, 2011 (SCI-Expanded) identifier identifier


We provide an efficient computational approach to solve the mixed integer programming (MIP) model developed by Tarim and Kingsman [8] for solving a stochastic lot-sizing problem with service level constraints under the static-dynamic uncertainty strategy. The effectiveness of the proposed method hinges on three novelties: (i) the proposed relaxation is computationally efficient and provides an optimal solution most of the time, (ii) if the relaxation produces an infeasible solution, then this solution yields a tight lower bound for the optimal cost, and (iii) it can be modified easily to obtain a feasible solution, which yields an upper bound. In case of infeasibility, the relaxation approach is implemented at each node of the search tree in a branch-and-bound procedure to efficiently search for an optimal solution. Extensive numerical tests show that our method dominates the MIP solution approach and can handle real-life size problems in trivial time. (C) 2011 Elsevier B.V. All rights reserved.