Lot-sizing for industrial symbiosis

Waste accumulation in landfills, global warming and the need to preserve finite raw materials push governments industries shift towards a circular economy. Industrial symbiosis represents sustainable way of sharing resources converting unavoidable production residues into useful added-value products. In this context, we introduce new planning problem arisen between two units (PU) within an industrial symbiosis. During process main product, residue is generated by first PU, which subsequently either used as second or disposed of. The PU can also purchase from external supplier. resulting combined has been formulated two-level single-item lot-sizing problem. We prove that NP-Hard irrespective residue, namely unstorable, storable with limited capacity. To efficiently solve problem, heuristic based on Lagrangian decomposition proposed. Extensive numerical experiments highlight effectiveness proposed solution method. impact collaborative framework, plans each are brought together, studied via comparative analysis different decentralized centralized collaboration policies. Valuable insights derived discuss managerial implications setting up supplier by-products its receiver.