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A Column-Generation Approach for a Short-Term Production Planning Problem in Closed-Loop Supply Chains

Author(s): Florian Sahling

Journal: BuR : Business Research
ISSN 1866-8658

Volume: 6;
Issue: 1;
Start page: 55;
Date: 2013;
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Keywords: closed-loop supply chains | column-generation | remanufacturing

We present a new model formulation for a multi-product lot-sizing problem with product returns and remanufacturing subject to a capacity constraint. The given external demand of the products has to be satisfied by remanufactured or newly produced goods. The objective is to determine a feasible production plan, which minimizes production, holding, and setup costs. As the LP relaxation of a model formulation based on the well-known CLSP leads to very poor lower bounds, we propose a column-generation approach to determine tighter bounds. The lower bound obtained by column generation can be easily transferred into a feasible solution by a truncated branch-and-bound approach using CPLEX. The results of an extensive numerical study show the high solution quality of the proposed solution approach.
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