Integration of operation routing and economic production quantity decisions in batch manufacturing systems

Models for the determination of economic production quantity (EPQ) are always presented in batch manufacturing as if machine setup cost and unit processing cost are easily definable. In a job processing situation where alternate machines exist for each operation and the operations within the job can be sequenced in more than one way, selection of the operation sequence and the machine to use for each operation can significantly affect the EPQ and the total manufacturing cost. The function of process sequencing and routing specification falls in the domain of process planning while the determination of the EPQ is the function of inventory control. These two functions have been generally undertaken in isolation of one another in most manufacturing systems despite the significant influence of the process planning decision on the efficiency of the lot sizing policy. In this paper, a methodology to integrate the operation sequencing and machine routing decisions of the process planner and the work of the inventory control analyst in order to minimize total cost of manufacturing in environment with routing flexibility is presented. The model is sufficiently flexible to deal with many production planning situations in which alternate processes exist. Solution algorithms are developed and computational results based on some sample problems are presented and discussed.