Single-stage resource allocation and economic lot scheduling on multiple, nonidentical production lines

This paper focuses on simultaneous resource allocation, lot-sizing, and scheduling in a multimachine, deterministic economic lot sizing for production environment. We consider the problem of apportioning item production to distinct manufacturing lines with different costs and capabilities (production rates). The objective is to minimize the long-run average production, setup, inventory, and shortage penalty costs (due to lost sales). Restricting attention to rotation schedules, we develop a concave minimization model of the problem, generate heuristic solutions and a lower bound on the cost of any feasible solution. Computational experiments indicate that our heuristic solution is within a few percent of the lower bound. We also investigate sensitivity of costs to model parameters, and illustrate how our model may be used to determine target values for equipment utilization.