Instances for decentralized collaborative lot sizing

Published: 10 January 2022| Version 1 | DOI: 10.17632/bwjgcksb2y.1
Margaretha Gansterer


Increasing customer demands for individualized products push manufacturing companies towards agile and modularized production processes. Digitalization enables them to efficiently connect with other companies in order to build up collaboration networks and to overcome inefficiencies by sharing resources among each other. Recently, it has been shown that collaborative lot sizing and orchestration of plans can yield considerable cost savings. However, literature mainly focuses on centrally planned frameworks, where collaboration partners are forced to reveal critical infor- mation. This condition can be seen as a barrier since manufacturers might be reluctant to enter such a collaboration. To overcome this, decentralized mechanisms are to be developed. In case of multi-level lot sizing decisions, however, extremely complex coordination problems can arise. We propose such a mechanism, which is based on bilateral negotiations between collaboration partners. In a computational study, we show that the gap in solution quality between a centrally planned and a myopic decentrally plannend approach is huge. Potential gains by far exceed losses of all individ- ual participants in the collaboration. The proposed negotiation-based mechanism is than compared against the other approaches. We can show that even with simple negotiation approaches, where no critical information has to be revealed, considerable gains can be achieved. However, in order to compensate participation losses and to ensure collaboration stability, no-information negotiations are not suitable.



Operations Research