Abstract
With the aim of increasing capacity to smooth production planning and coping with existence of random scrap in real fabrication processes, this paper explores an economic production quantity (EPQ)-based inventory system with random scrap and adjustable production rate. Mathematical modeling is used to carefully portray and analyze the problem, and the expected system cost function is derived and proved to be a convex function. Then, differential calculus is employed to help determine the optimal batch size for the proposed system. Numerical example along with sensitivity analysis is provided to demonstrate applicability of the obtained results. Analytical outcomes pointed out that this in-depth exploration to the problem reveals diverse important managerial decision-making required information.
Highlights
This paper explores an economic production quantity (EPQ)-based replenishment system with random scrap and adjustable production rate
With the aim of addressing aforementioned scrap and capacity increase issues, and providing production managers with a decision support-typed of system to deal with these practical situations, this study develops an exact model to portray the EPQ-based replenishment system with random scrap and adjustable production rate, and explores their effects on the optimal operating decisions
With the aim of increasing capacity to smooth production planning and coping with existence of random scrap in real fabrication processes, this paper examines an economic production quantity (EPQ)-based inventory system with random scrap and adjustable production rate
Summary
This paper explores an economic production quantity (EPQ)-based replenishment system with random scrap and adjustable production rate. Hariga and Ben-Daya [03] explored an imperfect EPQ problem, in which the production process may shift from in-control status to out-of-control status For this process transition, they examined effects of both distribution-based and -free bounds on the expected system cost. Chakraborty et al [05] examined an economic manufacturing quantity (EMQ) model with random breakdown, repair, stock threshold level, and variable production rate. They assumed that machine failure is a function of production rate and extra capacity is reserved to cope with possible uncertainties during production process. Additional studies that addressed diverse aspects of production systems with defective items can be referred to [06-13]
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