Multi-stage production with variable lot sizes and transportation of partial lots

Abstract

This paper describes a model for a multi-stage production/inventory system where lots may be of different sizes. In addition, either completed lots or partial lots, called batches, may be transported to succeeding stages. The model incorporates constraints on lot and batch-sizes and thus provides a rather comprehensive set of possibilities for organizing a production/inventory system. A heuristic solution procedure is developed and is shown to be `close to optimal' by bounding.