Multiproduct, Three-Stage Production Inventory Systems

This paper deals with production systems with three stages in series and producing multiple products. A method of determining a near optimal production plan taking into consideration the demands, the production rates, the set-up costs and all the relevant inventory carrying costs is discussed. This heuristic approach gives the method of determining the production batch quantities and the sequence in which the different products are to be taken up in a production cycle. A numerical example is also included. The results obtained for 21 test problems by the use of the heuristic are compared with the exact optimum values, and the power of the heuristic is demonstrated.