A Markovian approach for multi-level multi-product multi-period capacitated lot-sizing problem with uncertainty in levels

Abstract

This paper considers a multi-level, multi-item, multi-period capacitated lot-sizing problem with sequence-dependent family set-up times, set-up carry over and uncertainty in levels due to uncertainty in inspection, rework and scrap. In this study, we, first, determined total processing time for each product of each family. Then, expected number of times associated with visiting each level of each product as well as amount of raw materials are calculated. We developed a mixed integer linear programming model with a numerical example and sensitivity analysis.

Keywords:

• capacitated lot-sizing
• absorbing Markov chain
• uncertainty in levels
• scrap
• binominal experiments
• multi-level production planning