The multi-product, economic lot-sizing problem in flow shops: the powers-of-two heuristic

This paper presents a new and efficient heuristic to solve the multi-product, multi-stage, economic lot-sizing problem. The proposed heuristic, called the powers-of-two method, first determines sequencing decisions then lot sizing and scheduling decisions are determined. This method assumes that cycle times are integer multiples of a basic period and restricts these multiples to the powers of two. Once time multiples are chosen, we determine for each basic period of the global cycle the set of products to be produced and the production sequence to be used. Then a non-linear program is solved to simultaneously determine lot sizes and a feasible production schedule. To evaluate its performance, the powers-of-two method was compared to both the common cycle method and a reinforced version of the job-splitting heuristic. Numerical results show that the powers-of-two method outperforms both of these methods.