Production Inventory Models for a Multi-product Batch Production System

This paper presents an analytical model for capacitated batch production systems with the objective of investigating the effect of system utilization, production batch size, and production lead time on performance measures such as backorders and on-hand inventory levels. First, an exact analysis of a single product system and two product system is presented using the Markov chain approach. To overcome the computation complexity resulting from the explosion of state space, an alternative approach based on decomposition is proposed to analyze multi-product systems with more than two products. Numerical results indicate that the decomposition approach provides fairly accurate estimates of the performance measures. The analytical model also provides some useful insights on the effect of the production batch size and utilization on system performance.