Operational flexibility and optimal total production cost in multipleitem economic production quantity models

Abstract

This study investigates the problems of operational flexibility, optimal production rate and production runs in multiple-item economic production quantity models under a rotation cycle basis. The production rate of each item and the system rotation cycle are crucial decision variables in this study. The unit production cost of each item is a function of its production rate. The relationship between the optimal total production cost and operational flexibility, which is affected by the unit production cost function of each item, is analysed. Sensitivity analyses have been conducted to evaluate the effects of operational flexibility on the individual parameters of the unit production cost function. An industrial case has also been presented as an illustration.