Determining economic inventory policies in a multi-stage just-in-time production system

New manufacturing concepts, such as just-in-time (JIT) production, and quality at source tremendously impact on productivity and quality in many manufacturing systems. In order to implement the JIT manufacturing concept, one has to analyze its consequence on lot-sizing and work-in-process inventory. Realising the significance of modelling such a situation, a mathematical model is proposed to establish the relationship between the quality at source, work-in-process inventory and lot-sizes in a multi-state JIT production system. The model along with a search method is used to determine the economic production quantities by minimizing the total system cost.