Abstract:
Lot size inventory control problem with ambiguous variable demand is important in industry as
inventories can be a major commitment of monetary resources and affect virtually every
aspect of daily operations. Inventories can be an important competitive weapon and are a major
control problem in many companies, and improper lot sizes can affect the inventory levels and
the costs associated with them. Typically, a manufacturing firm will have one-third of its assets
invested in inventory. Inventory control is concerned with the management of this investment.
But at the same time in manufacturing firm, production wants efficient operation. This implies
large production orders which generate large inventories to reduce machine setup and limited
lotsize per setup. So the intense international competition in manufacturing has provided a strong
incentive to management to seek new, more effective ways of managing production to maintain
or achieve a competitive edge. As a result, thousands of companies have implemented Computer
based production and inventory control systems. One of the ways to control inventory is to
control lot-size. The objective of the research is to find a lot-sizing strategy that satisfies the
demands for all items over the entire horizon without backlogging, and that minimizes the sum
of inventory-carrying costs, fixed-order costs. All demands, cost parameters, and capacity limits
may be time dependent. The current research work has been directed toward the development of
a model for multi-item problem considering these parameters. The models have been executed
with data of a garment industry in Bangladesh.