Integrated batch size and setup reduction decisions in multi-product, dynamic manufacturing environments

We present a comprehensive model for simultaneously planning for the setup time reductions and the batch sizes of several products over a finite planning horizon in a capacitated manufacturing environment. It is assumed that by investing in the appropriate amounts of various resources (such as R&D time, equipment, fixtures, tooling, re-layout, etc.) setup times can be reduced. The problem is to determine how much to cut the setup time for each product and how much of each product to produce in each period of the planning horizon so that total costs are minimized, subject to limits on the manufacturing and setup reduction resources. A nonlinear, mixed-integer mathematical programming model of this problem is formulated and a heuristic method is developed for solving it. The proposed model is broad and can be directly applied in a variety of practical situations including the case where discrete technology choices must be made.