optimisation problems successfully. Firstly in this study its application to DLP is presented. DLP is a complex combinatorial optimisation problem. Several attempts have been done in the literature in order to solve this problem. In this study, a SA algorithm with a simple but effective data structure and neighbourhood generation mechanism is proposed for its solution. Solution vector is presented as a two-dimensional matrix and neighbourhood solutions are generated from this matrix by swapping elements of its rows. The proposed SA algorithm is applied to test problems from the available literature that results are known. In these tests the proposed algorithm found the optimal solutions and performed better than the dynamic programming algorithm of Rosenblatt [5] and genetic algorithm of Conway and Venkataramanan [13]. Additional computational workis performed on a data set obtained from Balakrishnan and Cheng [14], which contains problems for 6,15,30 departments for 5 and 10 periods. The results of this study and