INTEGRATED PRODUCTION SCHEDULING,COORDINATION, AND CAPACITY INVESTMENT

When capacity is used to produce multiple products, the production scheduling, coordination, and capacity investment decisions are interrelated. For batch processes, we analyze capacity investment in light of the inventory holding costs based on rotation cycle scheduling and shared production among multiple facilities. We optimize the sum of these inventory and capacity investment costs to determine the best type of capacity in which to invest. Finally, we show how to extend our model to incorporate process design issues.