An application of cyclical master production scheduling in a multi-stage, multi-product environment

This paper presents an integrated approach to solve a multi-item lot-sizing and scheduling problem in a two-stage flow shop environment. The problem tackled stems from a real world process and the data used are the actual process information. In this production system, all items are produced in two stages. The first stage is process-oriented and produces a limited number of intermediate products. The second stage is flow shop oriented and splits up the intermediate products into a very large number of end products. The objective is to develop an integrated repetitive cyclic master production plan, minimising the total set-up and inventory holding costs of the work-in-process and end products. The problem corresponds with solving the capacitated lot sizing problem in a two-stage, multi-product environment under the additional constraint of repetitive cyclic production schedules. The model will use a level by level approach. A heuristic approach will first establish a common cycle length and production frequencies. Secondly a mixed integer linear program will define the production sequences ensuring a smooth load profile. The proposed solution approach is tested out as the main planning concept within the MPS department of a company producing photographic materials (e.g. X-ray film, graphical film). Agfa, the involved company, has a number one or two selling position in the mentioned product groups. This paper will describe the solution approach, the mathematical model and operational results after one year of practical usage.