A simulation–optimization approach for capacitated lot-sizing in a multi-level pharmaceutical tablets manufacturing process

This paper discusses an iterative simulation–optimization approach to estimate high-quality solutions for the multi-level capacitated lot-sizing problem with linked lot sizes and backorders (MLCLSP-L-B) based on probabilistic demand. It presents the application of the Generalized Uncertainty Framework (GUF) to the MLCLSP-L-B. The research provides an exact mathematical problem formulation and a variable neighborhood search (VNS) algorithm for the GUF. The evaluation procedure uses anonymized real-world data of multi-level pharmaceutical tablets manufacturing processes. It compares the GUF against a two-stage stochastic programming (SP) approach from the literature regarding manufacturing costs and customer service levels. Finally, planning rules and managerial insights are given for the tablets manufacturing processes.