Exact solution approaches for bilevel lot-sizing

Tamás Kis, András Kovács

Research output: Contribution to journalArticle

14 Citations (Scopus)

Abstract

In this paper we propose exact solution methods for a bilevel uncapacitated lot-sizing problem with backlogs. This is an extension of the classical uncapacitated lot-sizing problem with backlogs, in which two autonomous and self-interested decision makers constitute a two-echelon supply chain. The leader buys items from the follower in order to meet external demand at lowest cost. The follower also tries to minimize its costs. Both parties may backlog. We study the leader's problem, i.e.; how to determine supply requests over time to minimize its costs in view of the possible actions of the follower. We develop two mixed-integer linear programming reformulations, as well as cutting planes to cut off feasible, but suboptimal solutions. We compare the reformulations on a series of benchmark instances.

Original languageEnglish
Pages (from-to)237-245
Number of pages9
JournalEuropean Journal of Operational Research
Volume226
Issue number2
DOIs
Publication statusPublished - Apr 16 2013

Keywords

  • Bilevel optimization
  • Extended formulations
  • Integer programming
  • Supply chain management

ASJC Scopus subject areas

  • Computer Science(all)
  • Modelling and Simulation
  • Management Science and Operations Research
  • Information Systems and Management

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