A Note on ‘Economic order quantities and variations in production load’ by S. Axsäter

Abstract

Axsater (1980) considered the problem of determining economic batch quantity under conditions of variation in production load. He minimized the variable cost per unit of time for an item and obtained the economic batch quantity by solving a fourth-order equation. He obtained the following model for the total variable cost C where N = number of items; d = demand per unit of time per item; h = unit stock holding per unit of time; q = batch of quantity; T = planning period; K = cost of set-up (ignoring capacity cost); c = capacity cost per time unit; M = capacity allocated.