Production batch sizes are an issue all producing companies has to face. A decision to set or change a batch size in a flow will cause internal issues as each department will most likely assess the effect for them and, if judged negative, will work against such a change. Also, batch sizes can cause the different production processes to decide for a batch size that is suitable for them but not for the next process, causing unnecessary inventories. With modern logistical theory speaking of just in time, lean management and inventory control it is easy to understand that decisions are often based to fit these theories. But to actually move towards the most optimal batch size, the effect on costs in all departments must be taken into consideration. This thesis discusses the implications of changing batch sizes and the effect on different departments’ costs as well as the company's total cost. By mapping two flows, studying the theory on costs' relations to batch sizing, discussing the total effect of changing the batch size as well as showing the result, this master thesis will give the reader a good overview on how batch sizes changes the total cost in a company.
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