Lot-sizing in a serial distribution system with capacitated in-system production flow

In this paper, we focus on an N-stage serial production-distribution system with limited production capacity at the first stage. Our objective in such a system is to find inventory management policies that minimize the global logistic cost, including transportation and holding costs. We use myopic heuristics based on the breakdown of the system into local systems. One of these systems is a 2-stage system, and the second is a 3-stage system. They both can be solved with a very good performance guarantee. The successive optimizations of such systems provide quite good policies for the global system as asserted by the experimental results at the end of the paper.