A heuristic production lot scheduling model

Abstract This article describes a model which seeks to schedule the production of m products over the next n production planning periods in a manner which minimizes total setup, production, and inventory costs while observing all constraints imposed by the capacities of the productive resources. The model formulates this problem as a fixed charge problem, and then uses a modified version of the simplex method to locate optimal or near optimal solutions of this nonlinear programming problem. A discrete optimizing approach is used to estimate the effectiveness of the model.