Production capacity planning and control in multi-stage manufacturing

This paper develops a mathematical model for determining the optimum lot-sizes for a set of products and the capacity required to produce them in a multi-stage production system. The purpose of the modelling is to support capacity planning at the production function level and the basic criterion considered for the optimisation is the minimisation of the total system cost (TSC) per unit time. The TSC consists of (i) set-up cost, (ii) cost due to the quenching of batches, and (iii) hiring cost of the machines. An example is presented to explain the model.