Instances for decentralized collaborative lot sizing

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.