A Mixed Integer Programming Model Formulation for Solving the Lot-Sizing Problem

Maryam Mohammadi1, Masine Md. Tap2

1 Department of Industrial Engineering, Faculty of Mechanical Engineering, Universiti Teknologi Malaysia Skudai, Johor 81310, Malaysia

2 Department of Industrial Engineering, Faculty of Mechanical Engineering, Universiti Teknologi Malaysia Skudai, Johor 81310, Malaysia

IM19

Abstract

This paper addresses a mixed integer programming (MIP) formulation for the multi-item uncapacitated lot-sizing problem that is inspired from the trailer manufacturer.

The proposed MIP model has been utilized to find out the optimum order quantity, optimum order time, and the minimum total cost of purchasing, ordering, and holding over the predefined planning horizon.

This problem is known as NP-hard problem. The model was presented in an optimal software form using LINGO 13.0.

Keywords: Lot-Sizing Problem, Mixed Integer Programming, Optimum Order Quantity, Purchasing Cost, Ordering Cost, Holding Cost.