A profit-maximizing model for integrated lot-sizing and scheduling problem with multi-item supplier selection and demand packages

This research proposes a mathematical model in which the procurement and production lot-sizing are integrated with scheduling. In this model, the procurement lot-sizing comprises supplier selection and multiple transportation modes. This profit-maximizing model is developed with demand choice flexibility using two arrangements: with and without demand packages. The results represent that the objective function value of the model with demand packages is less than the model without packages while the computational time of the model with packages is greater than the other one. The impact of demand’s correlation on results is investigated through solving the problem with two correlation levels. Results show that the number of setups, total costs, and the number of incomplete packages are influenced by the demand correlation. Besides, the objective function value of the problem with positive demand correlation is higher. Results also certify the impact of discount schemes on productions, purchases, costs, and revenues. © INTERNATIONAL JOURNAL OF INDUSTRIAL ENGINEERING