Abstract
The importance of reducing product lotsizes in converting traditional job shops into just‐in‐time (JIT) type manufacturing systems has been addressed in the literature. This paper presents a lotsize reduction model for closed stochastic production systems. The model is formulated based on an M/G/c queuing lotsize model. Product lotsize choice is related to all major components of job flow time: waiting time in queue, batch processing time, batch moving time, and finished goods warehousing time. The research is motivated by the fact that an optimal lotsize solution that minimizes only average job waiting time in the shop may not be optimal when the effects of job batch processing time, batch moving time, and batch warehousing time are also considered. There is no general closed form solution to the model due to the complexity of its nonlinear formulation. Based on the unique properties of the model, heuristic solution procedures are developed. The research demonstrates opportunities for shop managers to significantly reduce product lotsizes while minimizing total operating cost.
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