An economic production quantity model with flexibility and reliability considerations

Research output: Journal article publicationJournal articleAcademic researchpeer-review

82 Citations (Scopus)

Abstract

The classical economic production quantity (EPQ) model assumes that items are produced by a perfectly reliable production process with a fixed set-up cost. While the reliability of the production process cannot be perfect without a price, its set-up cost can be reduced with investment in flexibility improvement. An EPQ model with a flexible and imperfect production process is proposed in this paper. This inventory optimization problem is then formulated as a geometric program (GP) and solved to obtain closed-form optimal solutions. After the theoretical treatment, a numerical example is provided to illustrate how the GP theories are applied to solve a given problem. Finally some aspects of post-optimality sensitivity analysis based on the GP approach are discussed.
Original languageEnglish
Pages (from-to)174-179
Number of pages6
JournalEuropean Journal of Operational Research
Volume39
Issue number2
DOIs
Publication statusPublished - 24 Mar 1989
Externally publishedYes

Keywords

  • geometric programming
  • Inventory

ASJC Scopus subject areas

  • Modelling and Simulation
  • Management Science and Operations Research
  • Information Systems and Management

Cite this