Manufacturing lot-sizing under MRP II environment: An improved analytical model & heuristic procedure

Under single-level lot-sizing problem, well known Wagner-Whitin algorithm based on Dynamic Programming (DP) provides optimal order schedule. Order schedule does not work properly under Manufacturing Resource Planning (MRP II), where it is considered multi-level capacitated problem and requirements of subcomponents are depend on the parent product. In this paper, we formulate a multi-level capacitated optimization model and develop a relatively efficient heuristic working under MRP II environment which considers work center capacities and interrelationship between levels in lot-sizing computation.