The Bayes Decision Rule for Economic Production Lot

• Main Authors: Cheng, Chih-Yuan, 鄭智元
• Other Authors: Wu, Ji-Cheng
• Format: Others
• Language: zh-TW
• Published: 2018
• Online Access: http://ndltd.ncl.edu.tw/handle/j66xrs

碩士 === 國立屏東科技大學 === 工業管理系所 === 106 === The production model in this case study of the company is based on make to order mode because there are many types of product specifications. When the company receives a customer order, the production management department determines the production quantity of the batch according to the order quantity and field experience. However, it is inevitable that processes affected by factors such as people, machines, materials, methods, and environment will produce defective items. After the inspection procedure, if the quantity of accepted goods is greater than the order quantity, then it will lead to excess supply and carrying cost of inventory. Otherwise, it will lead to excess demand and carry back out of stock cost. In this study, we propose an objective analysis method based on Bayesian statistics to develop Beta-Binomial model of nonconformities rate and defective quantity. Furthermore we derived the expected total cost function and obtained the Bayes decision rule for economic production lot. Finally, sensitivity analysis is used to explore the influence of various parameters on the decision variables. This established model, solution procedure, and programming code will provide the company the basis for formulating optimal production quantity.