On production batches, transfer batches, and lead times

In this paper we extend a model proposed by Karmarkar for studying the relationship between batch sizes and production lead times. In our extended model we differentiate between production and transfer batches and examine the effect of having smaller transfer batches on lead times. The model is used to obtain optimal transfer batch sizes and determine their relationship to the size of production batches. Further extensions are made to include multiple machines and material-handling considerations and to evaluate their effect on batching decisions. Conditions under which either type of batching can be useful are identified and the corresponding optimal batch sizes are described.