Lot streaming in multistage production systems

Lot streaming is a procedure in which a production lot is split into smaller sub-lots and moved to the next processing stage so that operations at successive stages of a multistage manufacturing system can be overlapped in time. Lot streaming reduces the manufacturing lead time and thereby provides an opportunity to lower the costs of holding work-in-process inventories. In this paper, we present an economic production lot size model that minimizes the total relevant cost when lot streaming is used. Using illustrative numerical examples, we show that our model can yield significant cost economies compared to the traditional approaches.