The Dynamic Family Assignment Heuristic

When multiple groups of orders are jointly replenished, the grouping of orders is typically performed once and remains static over the planning horizon. This, however, does not easily allow orders to be grouped by shipment due date, which is affected by updates in demand forecasts and could significantly impact container utilization. By dynamically assigning orders to containers, or "families", products can belong to different groups in different time periods. The dynamic family assignment heuristic iterates between a bin-packing problem and a multi-family joint replenishment problem to determine the optimal order-container assignments and volume to ship in each period, while maximizing container utilization and minimizing ordering and shipment costs. (C) 2015, IFAC (International Federation of Automatic Control) Hosting by Elsevier Ltd. All rights reserved.