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Buffer location and sizing to optimize cost and quality in semi-continuous manufacturing processes: Methodology and application

The problem of optimizing the location and size of buffers in semi-continuous manufacturing processes is considered. This problem is formulated as a non-linear integer program that determines the optimal buffer size for individual stages and allocates tanks to those stages in order to minimize total tank inclusion, holding, quality, process overshoot and undershoot costs. Heuristics are developed to solve the problem and bounds are derived to evaluate the quality of the heuristics. This method has been implemented at three glucose and three sorbitol production processes at a leading food processing company. This has resulted in total annual cost savings of around 6.4% or $9000 000. In addition, this work has had a significant impact on several strategic operational decisions at this company. [Supplementary materials are available for this article. Go to the publisher's online edition of IIE Transactions for the following free supplemental resource: Appendix]