Economic Production Quantity Model Research Articles

Analisis Persediaan Produk Gula Rafinasi Menggunakan Metode Economic Production Quantity

Overload is a condition where the goods stored in the warehouse exceed the existing capacity. With the accumulation, it will increase the storage cost for the products/goods stored. The purpose of this research was to help companies determine the optimal amount of production, optimal production time intervals and maximum product inventory so that there is no excess stock of products in the warehouse, and to obtain a minimum total inventory cost by using the Economic Production Quantity (EPQ) model. To collect the data needed in this study, secondary data was used which consists of production data and product delivery of company X. From the research results, the optimal production rate (Q*) is 13,646 MT/production cycle with an optimal production time interval of 1.16 months. or equal to 35 days, the maximum amount of inventory (Imax) was 429 MT. The total minimum inventory cost in one production cycle/month is Rp.167,925,698.28, -. The difference in total inventory costs generated using the EPQ method and calculations based on company conditions is 9% or equivalent to Rp.16,538,501, -. Based on the results of the sensitivity analysis it was known that all parameters are sensitive to Q*, Imax, and total inventory costs. However, a significant change is the parameter of saving costs, where the increase and decrease in saving costs will decrease and increase Q*, Imax, and the total cost of inventory.

A Fuzzy type Backlogging Production Inventory Model for Perishable Items with Time Dependent Exponential Demand Rate

Production inventory models have an important role in production planning and scheduling. In any economic production quantity (EPQ) model, the production rate is dependent on demand. In this paper we have established a production inventory model for perishable items with partial backlogging and time dependent exponential demand rate. Allowing shortage, it is partially backlogged. The unsatisfied demand is backlogged and it is considered a function of waiting time. The aim of our study is to optimizing the total profit during a given cycle. A numerical example is given in showing the applicability of the developed model.

Multi-Product Constrained Economic Production Quantity Models for Imperfect Quality Items with Rework

Multi-Product Constrained Economic Production Quantity Models for Imperfect Quality Items with Rework

A deterministic economic production quantity model with partial backordering and outsourcing repair of non-conforming products

In this paper, an economic production quantity model for an imperfect production system with reparation of non-conforming products is studied. The system allows shortages and a proportion of the shortages are backordered, following a last-in/first-out (LIFO) policy. It is assumed that the repair of non-conforming products cannot be carried out in the manufacturer's production system. Therefore, the company decides to have the repairs carried out in a repair centre. Depending on the time when the consignment of reworked items returns to the manufacturer's stocks, this study identifies three cases. The paper shows the derivation of the optimal solution for each case. The required conditions for the initial value of the backordering rate are developed in order to achieve optimal partial backordering. The model is also compared with a modified version that includes not only outsourcing repair of non-conforming products but also full backordering. The numerical examples comparing full backordering with partial backordering indicate that partial backordering is more profitable than full backordering when return of the repaired items to the system leaves a negative inventory level; that is, when there is a shortage.

A Sustainable Production-Inventory Model Joint with Preventive Maintenance and Multiple Shipments for Imperfect Quality Items

The quality of products, maintenance operations, and transportation policies are primary concerns of managers in inventory and production planning issues. Besides that, environmental concerns and regulations are growing increasingly and attracted much attention to green production concepts such as sustainable production. Previous authors conducted a wide range of research on these problems separately. Regarding the gap of an integrated framework, we formulate a sustainable Economic Production Quantity model by considering preventive maintenance and multiple shipments of items where a portion of produced items are defective. Two different Cases are studied. In Case I, we assumed that the demand in the production period is satisfied by the produced items in the previous cycle. In another state and in Case II, simultaneous production and consumption during the production period is considered and mathematically formulated. An analytical method is presented for solving the models, and a numerical example is discussed for both Cases. Moreover, sensitivity analysis of the models is carried out, and some managerial insight is derived by changing some of the critical parameters of models. Finally, we present some directions for feature researches.

ANALYSIS OF THE MANAGEMENT OF MATERIAL AND TECHNICAL ASSETS OF ENTERPRISES

Variability of demand for goods, depending on their availability and cost is a frequently observed phenomenon in the sphere of production and consumption. This paper discusses the possibility of using the ABC analysis for the inventory management system. This type of analysis makes it possible to apply various methods of inventory management for increasing the income and reducing the costs of particular products for manufacturers.
 As is known, the management process approach emphasizes the systematic study of management by defining management functions in an organization and then examining each in detail. There is a general agreement on the planning, organizing, and controlling functions.
 Traditional inventory management systems, such as the Lean Order Quantity (EOQ) model, are based on the assumptions of constant demand rate, constant inventory cost, and instant order. The EOQ assumption of instant order receipt means that the entire order quantity, that is, all units of the purchased lot is immediately received from the supplier. The Economic Production Quantity (EPQ) model weakens this assumption by including incremental order receipt, i.e. debit.
 In recent years, major advances in the sphere of management include the following elements:
 process approach
 management science
 decision support approach,
 scientific approach to human resources development, and sustainable competitive advantage.
 These four approaches complement one another in current practice and provide a useful framework for project management.
 This paper presents a realistic model of the goods production and their inventory, since ABC analysis or ABC classification is an integral part of materials management. According to this approach, the inventory is divided into three categories depending on income generation. The ABC analysis helps entrepreneurs identify the main types of products in the warehouse, prioritize the goods management based on their cost, and analyze customer demand for a specific product.

Two-Stage Production System Pondering upon Corporate Social Responsibility in Food Supply Chain: A Case Study

Corporate social responsibility (CSR) has witnessed remarkable attention in academic studies as well as being widely conducted in different industries globally. This specific case was chosen as one of the biggest dairy companies that may be represented for Vietnam dairy supply chain management. This research aims to integrate CSR initiatives into food supply chain management to clarify the optimal replenishment policy, paying close attention to the relationship between midstream manufacturers and final customers. The classical economic production quantity model has been employed, relying on the two-stage assembly production system. The three parameters that contribute to the total profit formulation that have been considered consist of the social charity amount for per unit selling, the unit wholesale price of the manufacturer, and the return rate of used goods from the customer. The study has stressed that there is a significant impact from implementing CSR initiatives on the enterprise’s inventory policy that leads to enhance the firm’s financial performance.

A FEPQ model of sustainable items with time and stock dependent demand under trade credit policy

Nowadays sustainable fuzzy economic production quantity (s-FEPQ) models gets more highlighted over classical fuzzy economic production quantity (EPQ) models. In this paper, we developed a fuzzy inventory model of sustainable items under time dependent quadratic rate of fuzzy demand and exponential holding cost where shortages are allowed and are fully backlogged considering obsolescence cost and carbon emission cost. Also the developed model is compared with stock dependent fuzzy demand. The proposed fuzzy inventory model is solved via generalised Hukuhara derivative approach. Two different cases are considered by using generalised Hukuhara: differentiability and generalised Hukuhara. For the first time, in this sustainable fuzzy EPQ model, an alternative approach of payment is proposed. After that, the proposed model has been solved by using multi-objective genetic algorithm. The proposed model and technique are lastly illustrated by providing numerical examples. The results from the two methods are compared and some sensitivity analyses both in tabular and graphical forms are presented and discussed.

An economic production quantity model with imperfection in process, unit transportation cost and backordering

An economic production quantity model with imperfection in process, unit transportation cost and backordering

An economic production quantity model with imperfection in process, unit transportation cost and backordering

Determining batch quantity for manufacturer in an imperfect production setup is a key issue during the last decade. Several mathematical models have been developed for this purpose but these models are lacking of the consideration of unit transportation cost in the system-wide cost. It is quite clear, that nowadays the transportation accounts for a huge portion of the overall cost of a product. Therefore, there is a need to involve transportation cost into the model for better decision-making process. In this way, the paper incorporates unit transportation cost in an imperfect environment and allowing backorders as well as random defects. Three cases have been modelled by assuming the defective rate following uniform, triangular and beta distribution. Sensitivity analysis has been carried out to point out the important specification of all the three cases of the model.

An economic production quantity (EPQ) model for a deteriorating item with partial trade credit policy for price dependent demand under inflation and reliability

It is well-known that the production-inventory problem for deteriorating items in the supply chain is a challenge when deciding on how many products to manufacture to obtain a maximum total profit. This research work develops an economic production quantity model for a deteriorating item under partial trade credit policy considering inflation, the effect of reliability factor of a production system, and the demand depending on the price of a product whose selling price is optimized. The production inventory model is formulated as a nonlinearly constrained optimization problem by analyzing different cases. Finally, through a numerical example, a sensitivity analysis is performed to study the effect of different parameters, changing one parameter at a time and keeping others fixed at their original values.

Random machine breakdown and stochastic corrective maintenance period on an economic production inventory model with buffer machine and safe period

In this paper, we have developed an economic production quantity (EPQ) model in which production is executed mainly by the original machine. But when the system faces disruption, the buffer of it continues the production. Here, we incorporate a fixed Safe Period running policy, in which the machine runs interruptedly, whenever production commences. The disruption of the system may occur at any moment of the time horizon over the safe period, and then, it will go under the corrective maintenance policy. Here, we take that both of the time of disruption and period of maintenance are continuous random variables. We have discussed the model under different safe period duration with corresponding disruption situations. Our main objective is to minimize the expected average total cost for all the cases concerning the production lot size. The model has also been illustrated numerically with some examples. To examine the robustness of the solution of this model, we discuss the sensitivity analysis for the parameters.

Optimal ordering policies in economic production quantity (EPQ) model with exponential time dependent demand and diminishing release strategy

Optimal ordering policies in economic production quantity (EPQ) model with exponential time dependent demand and diminishing release strategy

The effect of purchasing strategy on the economic production quantity model subject to random machine breakdown

The effect of purchasing strategy on the economic production quantity model subject to random machine breakdown

Effects of corporate social responsibility activities in a two-stage assembly production system with multiple components and imperfect processes

Implementation of corporate social responsibility (CSR) activities has been shown to improve the financial performance of many firms, and the effects are particularly evident in original brand manufacturers (OBMs). This paper studies the effects of two common CSR activities (social donations and green industrial development) on a two-stage assembly production system with multiple components and imperfect processes under the assumption that demand depends on selling price and CSR impact. The proposed problem is formulated as an economic production quantity (EPQ) model aimed at profit maximization, in which the decision variables include the production run time of each process, expenditures on social donations, and green industrial development. Our results prove that an optimal solution exists, and that it is unique. An algorithm for the computation of the optimal solution is also provided. The efficacy of the proposed model is demonstrated via numerical modeling of a footwear OBM in Taiwan. Sensitivity analysis revealed a number of managerial insights. For example, the results obtained under CSR operations can be compared with those obtained under non-CSR operations (under various parameters settings) to determine an opportune moment for the execution of CSR.

Shipment Policy for an Economic Production Quantity Model Considering Imperfection and Transportation Cost

Determining replenishment lot size and number of shipments in a traditional production setup has been of great interest among researchers during the last decades. In order to survive modern competition, the manufacturer has to make good decisions about the lot size that is to be shipped to the retailer. Recently, several researchers have developed mathematical models for modelling different real-world situations; however, these models are lacking due to a combination of imperfection in process and shipment lot sizing. Therefore, in the proposed research, shipment policy for an imperfect production setup has been developed with transportation costs taken into consideration. The model analyzed lot sizing for manufacturers and retailers with imperfections in terms of equally sized shipments. Furthermore, an all-unit-discount policy for shipment is considered in the proposed research, and at the end, numerical computation and sensitivity analyses are carried out to gain more insight into the specifications of the model.

Green design and product stewardship approach for two-warehouse inventory model

Background/Objectives: To trim down the recycling cost of any manufactured goods with the help of green design and product stewardship. Methods/Statistical analysis: For the planned EPQ (economic production quantity model) model, all costs are calculated to find total cost and this total cost is optimized with the help of the Hessian matrix. Sensitivity analysis is also carried w.r.t. different parameters, to illustrate the impact of these parameters on the proposed model. The convexity of the total cost function is also checked with the help of mathematical software Mathematica 9.0. Findings: Major finding of the proposed model are as follows: (i) Increase in the number of recycles results in the reduction of the total cost. (ii) Product stewardship parameter has a negative effect on total cost as the PS increases from 1 to 4 units, total cost decreases from 5926.00 to 5918.96 units (see Table 9 ) (similar findings can be written for numeric example 1 after correcting it). (iii) Green design costs have a positive effect on total cost, as the green design cost increases from 3 to 6 units, total cost also increases from 5918.49 to 5920.37 units (see Table 10 ). (iv) increase in the number of recycles results in the reduction of the total cost, as the number of recycles increases from 20 to 50 units total cost decreases from 5922.87 to 5919.12 units (see Table 11 ). Novelty/Applications: The Study of the effects of recycling by this green design and product stewardship approach makes the proposed model distinctive from the existing methods. The proposed model applies to eco-friendly manufacturing items with green design and product stewardship. Keywords: Green design; product stewardship; production model; own warehouse (OW); rented warehouse (RW); shortage; deterioration

ANALISIS PENGENDALIAN PERSEDIAAN BAHAN BAKU MENGGUNAKAN METODE ECONOMIC ORDER QUANTITY DENGAN PENGGUNAAN MODEL ECONOMIC PRODUCTION QUANTITY PADA BATIK SRIWEDARI DI SURAKARTA

The purpose of this study is to analyze the efficiency of controlling raw material inventory costs and analyze the differences in raw material inventory costs by using the Economic Order Quantity (EOQ) method and by using the Economic Production Quantity (EPQ) model compared to conventional methods on Sriwedari Batik in Surakarta. Based on the results of research that has been done, it can be concluded that the policies implemented by Batik Sriwedari in Surakarta have not yet reached the level of efficiency. The use of the EOQ method and the use of the EPQ model are able to regulate the inventory system and production system to be better, more measurable and reduce the total costs that must be incurred by the company.

Hybrid Harmony Search-Simulated Annealing Algorithm for Location-Inventory-Routing Problem in Supply Chain Network Design with Defect and Non-Defect Items

This paper considers a location-inventory-routing problem (LIRP) that integrates the strategic, tactical, and operational decision planning in supply chain network design. Both defect and non-defect items of returned products are considered in the cost of reverse logistics based on the economic production quantity model. The objective of the LIRP is to minimize the total cost of location-allocation of established depots, the cost of inventory, including production setup and holding cost, as well as the cost of travelled distance by the vehicles between the open depots and assigned customers. A Hybrid Harmony Search-Simulated Annealing (HS-SA) algorithm is proposed in this paper. This algorithm incorporates the dynamic values of harmony memory considering rate and pitch adjustment rate with the local optimization techniques to hybridize with the idea of probabilistic acceptance rule from simulated annealing, to avoid the local extreme points. Computational experiments on popular benchmark data sets show that the proposed hybrid HS-SA algorithm outperforms a standard HS and an improved HS for all cases.

Triangular Neutrosophic Based Production Reliability Model of Deteriorating Item with Ramp Type Demand under Shortages and Time Discounting

An economic production quantity model with triangular neutrosophic environment has been developed for deteriorating items with ramp type demand rate and reliability dependent unitproduction. The main objective of this paper is to determine the most cost effective production to generate better quality items under time discounting. Additionally, it is considered that the deterioration function deals with three parameters Weibull's distribution under finite time horizon. Moreover, it also considered the effect of shortages which are partially backordered and partially lost in sale. Here the reliability of the production process along with the production period is considered as decision variables. A numerical example is studied in both crisp and neutrosophic environment and a comparative analysis is performed here. It is observed that the model performs better in triangular neutrosophic arena ratherthan crisp domain. Finally, a sensitivity analysis of optimal solution is observed for some parameters and some crucial decision is taken with managerial insight.