Relax-and-Fix Heuristics Applied to a Real-World Lot Sizing and Scheduling Problem in the Personal Care Consumer Goods Industry

Abstract

This paper addresses an integrated lot sizing and scheduling problem in the industry of consumer goods for personal care, a very competitive market in which good customer service and cost management are crucial in the competition for clients. In this research, a complex operational environment composed of unrelated parallel machines with limited production capacity and sequence-dependent setup times and costs is studied. There is also a limitation in the total storage capacity for finished goods, a characteristic not found in the literature. Backordering is allowed, but it is extremely undesirable. The problem is described through a mixed integer linear programming formulation. Since the problem is NP-hard, relax-and-fix heuristics with hybrid partitioning strategies are investigated. Computational experiments with randomly generated and real-world instances are presented. The results show the efficacy and efficiency of the proposed approaches. Compared to the current solutions used by the company, the best proposed strategies yield results with substantially lower costs, primarily from the reduction in inventory levels and better allocation of production batches on the machines.