The capacitated dynamic lot size problem with variable technology

Traditionally, the technological coefficients in production models were ass umed to be fixed. In recent years however, researchers have used the learni ng curve model to represent nonlinear technological coefficients, and the d ynamic lot-sizing problem with learning in setups has received attention. T his article extends the research to consider capacity restrictions in the s ingle-level, multi-item case. The research has two goals, first, to analyze the effects of setup learning on a production schedule, and second, to inv estigate efficient ways of solving the resulting nonlinear integer model. P reviously derived algorithms do not address the issue of capacity; thus a h euristic is developed and its solution is compared with the optimal solutio n, where possible, or to a lower bound solution. (C) 2000 Elsevier Science Ltd. All rights reserved.