Operation routeing with lot sizing consideration in a manufacturing system

Process planning and inventory control are important manufacturing functions; proper execution of these functions can result in large cost savings. Process planning is typically responsible for identification and sequencing of required manufacturing processes. Inventory control then uses the result of process planning activities to determine economic production quantities. Today, this sequential decision process is commonly used in industry. However, although easy to implement, it cannot guarantee that an overall minimum cost plan will be generated. An integrated approach to process planning and inventory control functions should presumably yield better results. Such an integrated approach is presented in this paper. The problem is formulated as a constrained optimization model with sequence-dependent set-up and processing costs. Dynamic programming is used to solve the model.