An Economic Production Quantity Model With a Positive Re-setup Point Under Random Demand

• Main Authors: Chin-MingYang, 楊欽閔
• Other Authors: Shine-Der Lee
• Format: Others
• Language: zh-TW
• Published: 2014
• Online Access: http://ndltd.ncl.edu.tw/handle/96020925656535737031

博士 === 國立成功大學 === 工業與資訊管理學系 === 102 === In this paper, an extended Economic Production Quantity (EPQ) model is studied, where demand follows a random process. This study is motivated by an industrial case for precision machine assembly in the machinery industry. Both a positive resetup point s and a fixed lot size Q are implemented in this production control policy. The resetup point, i.e., the lowest inventory level to start the production, is adopted to minimize stock shortage during the replenishment cycle. The considered cost includes setup cost, inventory carrying cost, and shortage cost, where shortage may occur at the production stage and/or at the end of one replenishment cycle. Under some mild conditions, the expected cost per unit time can be shown to be convex with respect to decision parameters s and Q. Further computational study has shown that the proposed model outperforms the classical EPQ, when faced with random demand. In particular, a positive resetup point contributes to a significant portion of this cost savings when compared with that in the classical lot sizing policy. To simplify the mathematical model, the resetup point s is fixed to zero, a per unit time expected cost model is developed and analyzed. Under some mild conditions, it can be shown that the lower/upper bounds of the expected cost model are convex. Computational experiments have demonstrated that the proposed lot sizing policy outperforms the classical EPQ model when demand is random. In particular, significant cost savings can be achieved when demand rate and/or charge per unit short per unit time are high.