An effective method to reduce inventory in job shops

Inventory plays a major role in deciding the overall manufacturing costs, and a good scheduling system should balance the on-time delivery of products versus low work-in-progress (WIP) inventory. In this paper, the "constant work-in-process" (CONWIP) concept is applied to job shop scheduling to effectively control WIP inventory. A new mathematical formulation of CONWIP-based job shop scheduling with a separable structure is presented. By using a synergistic combination of Lagrangian relaxation, dynamic programming, and heuristic methods, good schedules are obtained in a reasonable amount of computation time. Results show that the new method can directly control the maximum WIP levels while maintaining good on-time delivery performance.