Manufacturing lot-sizing, procurement and delivery schedules over a finite planning horizon
Document Type
Article
Publication Date
1-1-2010
Abstract
In this study, an integrated manufacturing system for technology-related companies whose products are experiencing continuous price decrease during the life cycle is studied for optimal procurement, production and delivery schedules over a finite planning horizon. The model considers the inventory cost both at manufacturing and at delivery from supplier. Since the price is continuously decreasing, a manufacturing firm delivers the finished goods in small quantities frequently. Frequent deliveries in small lots are effective to reduce the total cost of the supply chain. The key for high-tech industries is to reduce the inventory holding time since the component prices are continuously decreasing, and this can only be achieved by implementing an efficient supply chain. Therefore, the main purpose of this paper is to develop an integrated inventory model for high-tech industries in JIT environment under continuous price decrease over finite planning horizon while effectively and successfully accomplishing supply chain integration so that the total cost of the system is minimal. An efficient algorithm is developed to determine the optimal or near-optimal lot sizes for raw material procurement, and manufacturing batch under a finite planning horizon. Finally, the solution technique developed for the model is illustrated with numerical examples. © 2010 Taylor & Francis.
Publication Source (Journal or Book title)
International Journal of Production Research
First Page
3619
Last Page
3636
Recommended Citation
Mungan, D., Yu, J., & Sarker, B. (2010). Manufacturing lot-sizing, procurement and delivery schedules over a finite planning horizon. International Journal of Production Research, 48 (12), 3619-3636. https://doi.org/10.1080/00207540902878228