Multi-Product Production Scheduling with Limited Warehouse Space: a Four-Step Approach

The research considers a production scheduling problem for the system where multiple products are produced on a single production line on a rotating basis. All finished products are stored in the same limited-capacity warehouse. With a storage space restriction, the scheduling objective is to minimize the total variable cost, which includes production setup and inventory holding costs. The four-step approach is presented to determine the proper production run size and the production schedule for each run. A numerical experiment on 180 randomly generated problems is conducted to evaluate the performance of the proposed method. The result indicates that the four-step approach can reduce the total variable cost by approximately 10.74% compared to a traditional solution. The difference is more emphasized when the slack time ratio is increased.