Batch sizing with controllable production rates

In this paper, we focus on a production system where a single product is manufactured on a single facility and delivered to the subsequent stage in batch shipments. In contrast to earlier works, we assume that the inventory on the producing stage is depleted at discrete time intervals, and analyse the effect of a variable production rate on the inventory build-up and the total costs of the system. We develop formal models for the case of equal- and unequal-sized batch shipments and propose solution procedures for the models. In a numerical study, we illustrate that deviating from the ‘design production rate’ of a production system may reduce inventory carrying costs and thus lead to lower total costs.