Lot-sizing in a class of multistage production inventory systems

In this paper, a mathematical model for a multistage multifacility and multiproduct production inventory system is presented. The basic objective of the model is to determine the economic production quantity (EPQ) for each product-stage-facility combination by minimizing total system cost. The total system cost consists of the set-up cost and the in-process inventory carrying cost. A numerical example is solved to explain the model; a search method has been used for the optimization. The results obtained are compared with the simulation results to validate the mathematical model.