(A) single-facility two-product inventory system with by-product

Abstract

This study is concerned with a single-facility production problem where the facility can be employed for two distinct processes; process 1 and 2. By process 1, two distinct products, say product 1 and 2, are produced simultaneously while product 2 can also be produced by process 2. For the model developed, each process is scheduled repeatedly in a sequence of production cycles over an infinite time horizon, but not always in equal lot size. The demands for the two products are known in their associated constant rates. The objective is to determine the repeating sequences of the two processes and their associated lot sizes which minimize the total cost consisting of set-up and inventory holding. A solution algorithm is developed and it is illustrated with a numerical example.