Dynamic multi-machine lotsizing and sequencing with simultaneous scheduling of a common setup resource

In this paper we propose a new solution approach to a lotsizing and scheduling problem which explicitly includes the simultaneous consideration of a common setup operator. This type of problem has been observed in several industries. We propose a model formulation of this dynamic capacitated multi-item multi-machine one-setup-operator lotsizing problem that is based on the proportional lotsizing and scheduling problem (PLSP) of Haase [1994. Lotsizing and Scheduling for Production Planning. Springer, Berlin]. In addition, we propose a model reformulation that is based on the simple plant location analogy. Finally, we extend the model for the case of a special type of sequence-dependent setup times. The different models are applied in an industrial planning environment and it is shown that good solutions are found within a few minutes of CPU time with a standard solver. Compared to the planning procedure used in the company up to now significant reductions in setup costs as well as feasible production schedules without backorders are achievable. (C) 2007 Elsevier B.V. All rights reserved.