Economic production quantity for profit maximization

In certain circumstances a relationship between unit contribution and producing output may exist in the classical economic production quantity (EPQ) production. We discuss an EPQ model with unit contribution dependent on production output and formulate the problem as signomial geometric problem (SPG) We show that a closed form optimal solution is readily obtainable for surch an SGP problem. We also illustrate that it is simple and easy to perform certain types of post-optimality sensitivity analysis on the optimal solution. An example is worked out in detail to demonstrate the viability of using geometric programming as an efficient solution method for dealing with a certain class of inventory optimization problems.