In this paper we consider the Discrete Lotsizing and Scheduling Problem with sequence dependent setup costs and setup times (DLSPSD). DLSPSD contains elements from lotsizing as well as from sequencing, and is known to be NP-Hard. An exact solution procedure for DLSPSD is developed, based on a transformation of DLSP into a Traveling Salesman Problem with Time Windows (TSPTW). TSPTW is solved by a novel dynamic programming approach due to Dumas et al. (1993). The results of a computational study show that the algorithm is the first one capable of solving DLSPSD problems of moderate size to optimality with a reasonable computational effort.
Published October 1994 , 30 pages