Tackling perishability in multi-level process industries

The classical multi-level lot-sizing and scheduling problem formulations for process industries rarely address perishability issues, such as limited shelf lives of intermediate products. In some industries, ignoring this specificity may result in severe losses. In this paper, we start by extending a classical multi-level lot-sizing and scheduling problem formulation (MLGLSP) to incorporate perishability issues. We further demonstrate that with the objective of minimising the total costs (purchasing, inventory and setup), the production plans generated by classical models are often infeasible under a setting with perishable products. The model distinguishes different perishability characteristics of raw materials, intermediates and end products according to various industries. Finally, we provide quantitative insights on the importance of considering perishability for different production settings when solving integrated production planning and scheduling problems.