Operations planning for a multi-stage kanban system

A multi-stage production line which operates under a just-in-time production philosophy with linear demand is considered here. The first workstation processes the raw materials after receiving them from suppliers, a kanban mechanism between the workstations transports the work-in-process to the succeeding workstation, and after processing them, delivers the finished products to a buyer or a warehouse. The problem is to find optimally the number of raw material orders, kanbans circulated between workstations, finished goods shipments to the buyers, and the batch size for each shipment (lot). A cost function is developed based on the costs incurred due to the raw materials, the work-in-process between workstations, and the finished goods. Optimal number of raw material orders that minimizes the total cost is obtained, which is then used to find the optimal number of kanbans, finished goods shipments, and the batch sizes for shipments. Numerical examples are used to demonstrate the computations of optimal parameters, and to configure the kanban mechanism on a timescale. Several avenues for future research are also indicated.