A tabu search heuristic for solving the CLSP with backlogging and set-up carry-over

In this paper, the multi-item, single-level, capacitated, dynamic lot sizing problem with set-up carry-over and backlogging, abbreviated to CLSP+, is considered. The problem is formulated as a mixed integer programming problem. A heuristic method consisting of four elements: (1) a demand shifting rule, (2) lot size determination rules, (3) checking feasibility conditions and (4) set-up carry-over determination, provides us with an initial feasible solution. The resulting feasible solution is improved by adopting the corresponding set-up and set-up carry-over schedule and re-optimizing it by solving a minimum-cost network flow problem. Then the improved solution is used as a starting solution for a tabu search procedure, with the value of moves assessed using the same minimum-cost network problem. Computational results on randomly generated problems show that the algorithm, which is coded in C++, is able to provide optimal solutions or solutions extremely close to optimal. The computational efficiency makes it possible to solve reasonably large problem instances routinely on a personal computer.