Process mean and production quantity settings by considering modified economic manufacturing quantity model

Abstract

In this article, the author proposes a modified economic manufacturing quantity (EMQ) model with deteriorating production process. Assume that the two independent quality characteristics of the product are normally distributed with known process standard deviation for a period of time. Consider the unstable production process with positive shift and an age-dependent positive drift while process variance increases. The bivariate quality loss function is applied to evaluate the product quality. The process mean and economic manufacturing quantity are jointly determined by minimizing the total expected cost of product per unit time. A solution procedure is devised to find the optimal solution for modified EMQ model and the sensitivity analysis of key parameters is conducted to investigate the effect on the optimal solution.