Two-Echelon Economic Production Quantity (EPQ) with Variable Production Rate

This project studies the production of a single type of product on multiple parallel machines by a manufacturer. The manufacturer has a pool of machines available with a combined production capacity greater than is required for production requirements. We assume that machine productivity may vary within a given range, which allows manufacturer to adjust their total production capacity to meet demand and demand by utilizing the different cost structures of available machines. In this case, the manufacturer must decide which machine to choose to generate a given requirement and how to operate the machine. Beyond that, the question is how to transport the product to the can forming production warehouse. This project presents a deterministic mathematical model to support the production and distribution planning scenario. Microsoft ®Excel is used to implement the model in commercial solution in a wide range of numerical experiments and the numerical examples are also presented to illustrate the significance of the model.