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A decomposition algorithm for robust lot sizing problem with remanufacturing option

Attila, Öykü Naz and Agra, Agostinho and Akartunali, Kerem and Arulselvan, Ashwin (2017) A decomposition algorithm for robust lot sizing problem with remanufacturing option. In: Computational Science and its Applications - ICCSA 2017. Lecture Notes in Computer Science . Springer, Cham, Switzerland, pp. 684-695. ISBN 9783319623948

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In this paper, we propose a decomposition procedure for constructing robust optimal production plans for reverse inventory systems. Our method is motivated by the need of overcoming the excessive computational time requirements, as well as the inaccuracies caused by imprecise representations of problem parameters. The method is based on a min-max formulation that avoids the excessive conservatism of the dualization technique employed by Wei et al. (2011). We perform a computational study using our decomposition framework on several classes of computer generated test instances and we report our experience. Bienstock and Özbay (2008) computed optimal base stock levels for the traditional lot sizing problem when the production cost is linear and we extend this work here by considering return inventories and setup costs for production. We use the approach of Bertsimas and Sim (2004) to model the uncertainties in the input.