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The paper presents a novel Iterated Local Search (ILS) algorithm to solve multi-item multi-family capacitated lot-sizing problem with setup costs independent of the family sequence. The model has a direct application to real production planning in foundry industry, where the goal is to create the batches of manufactured castings and the sequence of the melted metal loads to prevent delays in delivery of goods to clients. We extended existing models by introducing minimal utilization of furnace capacity during preparing melted alloy. We developed simple and fast ILS algorithm with problem-specific operators that are responsible for the local search procedure. The computational experiments on ten instances of the problem showed that the presence of minimum furnace utilization constraint has great impact on economic and technological conditions of castings production. For all test instances the proposed heuristic is able to provide the results that are comparable to state-of-the art commercial solver.
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