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Production Planning and Inventory Control in Pharmaceutical Manufacturing Process


Motivated by a specific type of semi-batch biotechnology manufacturing, perfusion, we develop insights into biopharmaceutical production planning and inventory control in two areas. First, at the production site, we consider a continuous time infinite horizon lot-sizing model where a single product is manufactured on a single machine. Each time manufacturing restarts, a random production rate is realized, and production continues at this rate until the machine is shut down. Although the rate is random and chosen from an arbitrary set of random rates, it is known as soon as production starts, so this information could be used to determine when to stop production. Based on the production planning models, we show that given the objective of minimizing either average cost per unit time or total discounted cost, it is optimal to produce up to the same inventory level regardless of the realized production rate; even when backorder allowed, it is optimal to keep the same maximum backorder position. We also develop heuristics for the multi-product version of this production model. Next, for two-stage manufacturing supply chains, we extend this model to consider a specific characteristic of biopharmaceutical inventory planning -- both intermediates and finished goods expire, but the expiration "clock" is restarted at each stage. We propose a two-stage production-inventory integrated model for this setting and develop two heuristics for this model -- fixed size and fixed ratio shipment policies.

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