AbstractThis paper considers the job (lot) scheduling problem for two-stage flow shops in which the movement of transfer batches (sublots) from the first stage to the next are allowed. Set-up, processing and removal times are considered as separable and independent of the order in which jobs are processed at any of two stages. An optimal transfer batch sizing and scheduling algorithm which has an objective of minimizing the maximum flow time (makespan) is developed and demonstrated by a numerical example.