The Multi-Product Production Cycling Problem

Abstract

The multi-product production cycling problem is concerned with the determination of a production/inventory policy for a single capacitated production facility which is dedicated to producing a family of products. This paper studies this problem assuming stochastic demand. The one-product problem may be analyzed as a Markov decision problem and solved as such. For the multi-product problem, a heuristic decision rule is proposed based on the analysis of the one-product problem, and a new notion: the composite product. This heuristic is then tested by simulation on a series of problems, and is shown to be the most effective of the heuristics considered for the set of test problems