Abstract
The literature has several models that jointly determine the economic production quantity (EPQ) and the rate of production. Very few models define production rate explicitly. In this article, the cutting speed controls the production rate and the proportion nonconforming. Thus, we propose a model that integrates EPQ, machining economics and quality. Even though the objective function of the model is non-convex, we show for realistic values of some technical parameters that a local minimum of the proposed mathematical model is also global. Examples clearly show the effect of the production economics factors on the optimal machining speed and production quantity.
Highlights
The economic production quantity (EPQ) is a well-known concept in operations management
This article contributes to the literature by considering quality in an economic lot sizing and machining economics model with variable production rates
The authors are unaware of any model in the literature that accounts for quality within the context of integrated machining economics and economic lot sizing
Summary
The economic production quantity (EPQ) is a well-known concept in operations management. Many researchers studied different settings and extensions of this classical problem These include, but are not limited to, integrated models,[3] bundling strategies,[4] variable lead-time,[5] variable production rate,[6] and variable holding cost.[7] Several survey papers can be found on this problem and its variations, as examples: Glock,[8] Ramasesh,[9] Drexl and Kimms,[10] and Zoller and Robrade.[11]. International Journal of Engineering Business Management function is usually assumed.[16] This article contributes to the literature by considering quality in an economic lot sizing and machining economics model with variable production rates. The authors are unaware of any model in the literature that accounts for quality within the context of integrated machining economics and economic lot sizing. The rest of this article is organized as follows: the second section presents the relevant literature review, the mathematical model is provided in the third section, the fourth section presents some illustrative examples, and the fifth section concludes the article
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