ECONOMIC LOT SCHEDULING PROBLEM WITH RAW-MATERIAL CONSIDERATIONS

We extend the traditional model of the economic lot scheduling problem by considering various issues associated with the management of the r aw materials for production. Several items are produced on a single ma chine at finite production rates with setup times, and setup and inven tory holding costs. Raw materials are used for the production of these items. In the presence of setup and holding costs for the raw materia ls, we first formulate a planning model which provides a sharp lower b ound on the cost of any policy for the problem. The solution is used t o obtain policies which are guaranteed to be very close to optimal in the worst case. Finally, we consider the problem of obtaining good fea sible schedules for both the machine and the raw materials.