The Economic Lot-Scheduling Problem: Achieving Feasibility Using Time-Varying Lot Sizes

This paper considers the Economic Lot Scheduling Problem: that is, the problem of scheduling several products on a single facility so as to minimize holding and setup costs. We develop a formulation that provides feasible schedules by allowing the lot sizes and thus the cycle times for each product to vary over time and by explicitly taking into account setup times. Our main results characterize when feasible schedules exist, quantify the insensitivity of the schedules' costs to minor adjustments, and thus show how close the schedules will be to ones with optimal equal cycle times. We also present a heuristic for finding good feasible schedules.