Economic lot scheduling with deliberated and controlled coproduction

Abstract

This paper presents an algorithm to define the optimal parameters for deliberated and controlled coproduction in an economic lot scheduling problem setting (DCCELSP). Coproduction is said to be deliberated and controlled because it is possible to decide whether or not to coproduce when all the parameters associated with the process are known. The aim is to determine how to produce two products most economically where deliberated coproduction is an option. For this purpose, a procedure for defining optimal lot periods is introduced. Two models are proposed for this procedure and a numerical illustration is provided to gain insight into their dynamics. The cost advantages of coproduction were found to depend on the relationship between setup and holding costs, production rates, and demand for products. The more similar these system parameters are and the higher the machine usage ratio is, the more favourable coproduction is. Additionally, if coproduction is not deliberated appropriately, costs soar.