Abstract
Inventory control models deal with production planning in order to minimize inventory and shortage cost, while cellular manufacturing analysis mainly addresses how machines should be grouped and parts be produced. A mathematical programming model is developed using an integrated approach for production and inventory planning in a cellular manufacturing environment. The mathematical programming model minimizes inter‐cell material handling cost, finished‐good inventory cost and system set‐up cost. The non‐linear mixed integer programming model cannot be directly solved for real size practical problems due to its NP‐complexity. A decomposition‐based heuristic algorithm was then developed to efficiently solve the integrated planning and control problem. Numerical examples are provided to test and illustrate the model and the solution method presented in this paper.
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