INTEGRATED PRODUCTION-INVENTORY MODEL FOR MULTI-PRODUCTS ON A SINGLE FACILITY

Abstract

A production-inventory model is developed which integrates the production planning problem of the multi-products produced on a single facility and the inventory problem of the related raw materials. The objective is simultaneously to determine the production schedule. the production sequence and the procurement policy of the raw materials in a way that minimizes the total annual variable cost. Based on the common cycle approach, an iterative solution procedure is suggested and illustrated with a numerical example.