Material flow system integration in EOQ, ELSP, and Kanban production environments

A traditional EOQ model determines the order quantity considering only the trade-off between inventory and order costs, ignoring material handling design issues. In most research on the ELSP, the cycle length is found based on the inventory and setup costs, overlooking material handling cost. Also, most studies concerning container size and the number of Kanban in Kanban systems disregard material handling design issues. However, material handling design is a very significant issue since it has been estimated that in a typical factory an item spends about 50 to 87% of its total production time in material handling and material handling cost represents between 15 to 70% of the total manufacturing cost.; It has been noted that one of the main reasons that the benefits resulting from integrated manufacturing design has been below expectation is that integration has been limited to product design and process planning issues and has completely excluded material flow system design issues. Therefore, this study addresses the integration of material flow design issues, such as unit load size, material handing equipment selection and requirements, and material flow path selection, and decision variables, such as order quantity in economic order quantity (EOQ), cycle length in economic lot scheduling problems (ELSP), and container size and number of Kanban in a Kanban system, all within a hybrid production system (EOQ, ELSP and Kanban system) which has a fixed facility layout and limited storage capacity.; The integration of the material flow system problem results in very large computational requirements in order to find the optimal solution since the problem is a large scale, nonlinear, 0-1 integer problem. Therefore, a heuristic method is developed to solve the integrated problem.; The integrated approach is compared with a traditional approach (i.e. sequential) for each environment (EOQ, ELSP, and Kanban system), and it is found that the solution quality is significantly improved. The impact on MHE selection and requirements is explored with respect to varying the mix of ELSP and Kanban environments. This analysis reveals that even though the total production demand is the same, the demand on the material flow varies with respect to how the system is operated (ELSP vs. Kanban).