In this paper we consider the capacitated lot-sizing problem (CLSP) with linear costs. It is known that this problem is NP-hard, but there exist special cases that can be solved in polynomial time. The purpose of this paper is twofold. First, we derive a backward algorithm based on the forward algorithm by Chen et al. (1994), which solves the general CLSP. We give a problem instances that requires exponential running time using the backward algo- rithm. Second, we provide a new O(T2) algorithm for the CLSP with non-increasing setup cost, general holding cost, non-increasing production cost and non-decreasing capacities over time. This is done by adapting the backward algorithm. Numerical tests show the better performance of our algorithm compared to the algorithm proposed by Chung and Lin (1988).

capacitated lot-sizing problem, inventory, production
Econometric Institute Research Papers
Erasmus School of Economics

van den Heuvel, W.J, & Wagelmans, A.P.M. (2003). A geometric algorithm to solve the NI/G/NI/ND capacitated lot-sizing problem in O(T2) time (No. EI 2003-24). Econometric Institute Research Papers. Retrieved from