The present research discusses an application of production management relevant to the production planning of a chemical firm which produces goods according to orders placed by clients. A number of difficulties have precluded the direct use of the ELSP type of model. This paper describes the challenges met and discusses the options adopted relative to setup costs, production sequencing, and the production of small orders, which require a short production time but long setups. The study includes the development of a production sequence methodology based on the traveling salesman problem, followed by an algorithm to reduce earliness and tardiness penalties.
the economic lot size problem; production planning; earliness and tardiness costs; setup costs
