Integrated lot-sizing and scheduling for just-in-time production of complex assemblies with finite set-ups

This paper addresses the integrated scheduling and lot-sizing problem in a manufacturing environment which produces complex assemblies. Given the duedates of the end items, the objective is to minimize the cumulative lead time of the production schedule (total makespan) and reduce set-up and inventory holding costs. A JIT production strategy is adopted in which production is scheduled as late as possible (to minimize WIP costs), but without backlogging end items. The integrated scheduling and lot-sizing problem within such an environment has been formulated and is NP hard. An efficient heuristic is developed that schedules operations by exploiting the critical path of a network and iteratively groups orders to determine lot-sizes that minimize the makespan as well as set-up and holding costs. The performance of the proposed heuristic is evaluated and numerical results are presented comparing the savings achieved in makespan and cost over a lot-for-lot production strategy, and scheduling using an existing heuristic. More generally, this study demonstrates that lot-for-lot production in small batches may not be the best JIT strategy in an assembly environment with finite set-ups.