A hybrid search heuristic for supply chain planning with a multi-level multi-item capacitated lot sizing model

Planning distributed manufacturing logistics is one of the main issues in supply chain management. This paper proposes a hybrid heuristic approach for the Multi-Level, multi-item Capacitated Lot Sizing Problem (MLCLSP) in supply chain network. MLCLSP corresponds to a mixed integer programming (MIP) problem. With integer variable solutions determined by heuristic search, this MIP problem becomes linear program (LP). By repeatedly solving the relaxed MIP problems with a heuristic search method in a hybrid manner, this proposed approach allocates finite manufacturing resources for each distributed facilities and generates feasible production plans. Two heuristic search algorithms, tabu search and simulated annealing are presented to solve the MIP problems. The experimental test evaluates the computational performance under a variety of problem scenarios.