Simulation Optimization for the Stochastic Economic Lot Scheduling Problem with Sequence-Dependent Setup Times

Nils Löhndorf, Manuel Riel, Stefan Minner

Publication: Scientific journalJournal articlepeer-review

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Abstract

We consider the stochastic economic lot scheduling problem (SELSP) with lost sales and random demand, where switching between products is subject to sequence-dependent setup times. We propose a solution based on simulation optimization using an iterative two-step procedure which combines global policy search with local search heuristics for the traveling salesman sequencing subproblem. To optimize the production cycle, we compare two criteria: minimizing total setup times and evenly distributing setups to obtain a more regular production cycle. Based on a numerical study, we find that a policy with a balanced production cycle outperforms other policies with unbalanced cycles.
Original languageEnglish
Pages (from-to)170 - 176
JournalInternational Journal of Production Economics
Volume157
DOIs
Publication statusPublished - 2014

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