Optimal Design of Process-inventory Network Operating on Daytime and Weekdays

This study sought to find an analytic solution to the problem of determining the optimal capacity of a process-inventory network to meet demand for finished products in a system operating on daytime and weekdays. The previous research about optimal design of process-inventory network assumed the operation of 24 hours per day and no holidays. However, many batch plants operate only daytime and weekdays. The objective function of the optimization is minimizing the total cost, which is composed of setup and inventory holding costs as well as the capital costs of constructing processes and storage units. A production and inventory method, the PSW (Periodic Square Wave) model, provides a unique graphical method to find the upper/lower bounds and average of material flows, which are used to construct terms of the objective function and constraints of the optimization model. The advantage of this model is that it provides a set of simple analytic solutions while also maintaining a realistic description of the material flows between processes and storage units; as a consequence of these analytic solutions, the computation burden is significantly reduced. The resulting optimal batch and storage size equations operating on daytime and weekdays are quite different from the ones operating on 24 hours per day and no holidays.