An integrated multi-lot-size production inventory model for deteriorating item
The integration of production and inventory model is one of the key factors of successful e-business. In this paper we develop a multi-lot-size production and inventory model of deteriorating items with constant production and demand rates. By considering the perspectives of both the producer and the buyers, a mathematical model subject to multi-lot-size production and distribution is developed. The JIT lot-splitting concept from raw material supply to production and distribution is derived. The integration and lot-splitting effects with JIT implementation have contributed significantly to cost reduction. This paper discusses the integration of multi-lot-size production inventory system for deteriorating items. The purpose of this study is to derive the JIT implementation of a deterministic production and demand system. Both the lot-splitting material flow from supplier to producer, and the lot-splitting product flow from producer to multi-buyer are considered in implementing this concept. Due to rising cost, shrinking resources and shortened product life cycle, the integration of the whole supply chain system is significant.
integrated multi-lot-size production inventory deterioration jit