The high pace of waste accumulation in landfills and the depletion of scarce natural resources lead us to seek pathways for converting unavoidable production outputs into useful and high added-value products. In this context, we formalize and propose a model for the single-item lot-sizing problem, which integrates the management of unavoidable production residues classified as by-products. During the production process of a main product, a by-product is generated, stored in a limited capacity and transported with a fixed transportation cost. This problem is investigated for two cases of the by-product inventory capacity: time-dependent and constant. We prove that the problem with inventory capacities is NP-Hard. To solve it optimally, we develop a pseudo-polynomial time dynamic programming algorithm. For the case with stationary inventory capacities, a polynomial time dynamic programming algorithm is proposed.

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European Journal of Operational Research
Department of Econometrics

Suzanne, E. (Elodie), Absi, N, Borodin, V. (Valeria), & van den Heuvel, W. (2020). A single-item lot-sizing problem with a by-product and inventory capacities. European Journal of Operational Research. doi:10.1016/j.ejor.2020.05.017