Model and solution for the multilevel production-inventory system before ironmaking in shanghai baoshan iron and steel complex

Abstract

This research deals with the production-inventory problem originating from the ironmaking production system in Shanghai Baoshan Iron and Steel Complex (Baosteel). To solve this multilevel, multi-item, multi-period, capacitated lot-sizing problem, a deterministic mixed integer programming (MIP) model based on the minimization of production and inventory costs is formulated to determine the production and inventory quantities of all materials in each time period under material-balance and capacity constraints. Due to the large-scale variables and constraints in this model, a decomposition Lagrangian relaxation (LR) approach is developed. Illustrative numerical examples based upon the actual production data from Baosteel are given to demonstrate the effectiveness of the proposed LR approach. © Springer-Verlag Berlin Heidelberg 2006.