Timing and lot-sizing in production control

This paper considers the case of a one-stage production system with several products where the lot sizes may vary around a norm that is determined at the tactical level of control. This is may be thought of as a component shop with controlled order release. The necessity to establish such a norm lot size at the tactical level may follow from the fact that the setup times are so long that the lot sizes have to be much larger than the customer orders. The influence of timing and (detailed) lot-sizing on system performance as measured by shortage and holding costs is investigated. For the case of a component shop under workload-based release control, it will be shown that detailed lot-sizing has little influence on system performance. Timing has an influence primarily insofar as it affects the total inventory. This implies that instead of fixing the average lot size at the tactical level one may fix the lot size completely at the level, and it also implies that timing and production allocation may be controlled at different levels.