The impact of lot-sizing on net profits and cycle times in the n-job, m-machine job shop with both discrete and batch processing

One of the key factors for productivity growth in the semiconductor industry is the improvement in overall equipment effectiveness (OEE). In order for the industry to meet its future goals it must find methods to continuously improve its OEE. This study assesses the impact that lot sizes can have on the operational variables that most influence OEE, net profits, cycle-time, throughput, work-in-process, and operating expenses. In a multiple operation system, where both discrete and batch processing is utilized, the interactions among products, product lot sizes, and equipment load capacity affect the arrival and service rates of all operations. As a result, cycle time and its components, throughput and work-in-process, are affected. This study shows that progressively smaller lot sizes do not provide continuous improvements in cycle time, throughput, work-in-process inventories, operating expenses, or net profits. Furthermore, we show that the impact of lot sizes on cycle times is not significantly related to setup times.