An integrated model for inventory and production planning in a two-stage hybrid production system

Abstract

A two-stage hybrid flow-shop production system is considered. The first stage is a process production system and the second stage is a job-shop production system. The two stages are separated by an intermediate warehouse to introduce flexibility (some independence) in the planning of production at both stages. The inventory level at the warehouse should be optimized to provide a trade-off between the cost of carrying the inventory of the semi-finished products, the minimum batch size requirement in the first stage, and the required service level at the second stage. An integrated model for planning the production in these hybrid flow-shop production systems types is developed. The objectives of optimizing the production and inventory costs at the two stages of the system, including the warehouse, while satisfying customer demands, are considered. An algorithm to solve the suggested model is described in detail, and a solution is provided for a real world case, which has inspired the study. A computational study to measure the performance of the approach was also carried out and the results are reported.