An integrated multi-lot-size production inventory model for deteriorating item

The integration of production and inventory model is one of the key factors of successful e-business. In this paper we develop a multi-lot-size production and inventory model of deteriorating items with constant production and demand rates. By considering the perspectives of both the producer and the buyers, a mathematical model subject to multi-lot-size production and distribution is developed. The JIT lot-splitting concept from raw material supply to production and distribution is derived. The integration and lot-splitting effects with JIT implementation have contributed significantly to cost reduction.