Optimization of a multi-stage production-inventory system with significant set-up operation time

An analytical model is presented for determining the economic production quantity (EPQ) at each facility in a multi-stage, multi-facility and multi-product production-inventory system. The special feature of this model is that the time required for set-up operations (loading and unloading of items) and the corresponding process inventory build-up is considered. The production system considered for modelling has multiple spindle and batch blocking facilities to reduce the processing time per unit of product. The main objective of the model is to find EPQs by minimizing the total system cost. A search method has been used to optimize the batch size. A numerical example is presented to illustrate the model.