Dynamic lot size/sequencing policies in a multi-product, single-machine system

Abstract

This paper is concerned with the modeling and analysis of a single-machine, multi-product, integrated production-inventory system. A semi-Markov model is developed that incorporates a state-dependent control system. Control optimization is achieved through the use of Markov-renewal programming. Three- and four-product models are developed. The model(s) are exercised over a range of parameters in order to determine the characteristics of the system, and to identify the structure of the optimal control rules of the system. The result is that one can identify simple basic rules of operation that are near-optimal in a dynamic environment, and that make sense intuitively.