While external product returns from customers are well-studied in the dynamic lot-sizing literature, the same is not true for internal returns resulting from imperfect production. We approach this problem by considering a basic dynamic single-product lot-sizing model in which some of the items produced do not meet quality requirements and, therefore, must be reworked. The objective is to minimize the sum of setup and inventory costs for new production and rework while fully satisfying demand. To this end, three heuristics are developed, based essentially on two production policies that can efficiently coordinate new production and rework for different parameter constellations. This is confirmed by a computational study in which the developed heuristics yielded highly competitive results compared to those obtained with a commercial solver.
|Title of host publication||Computational Logistics. ICCL 2022. Lecture Notes in Computer Science|
|Editors||J. de Armas, H. Ramalhinho, S. Voß|
|Number of pages||16|
|Publication status||Published - 2022|