A generalized geometric-programming solution to "An economic production quantity model with flexibility and reliability considerations"

Research output: Journal Publications and Reviews (RGC: 21, 22, 62)21_Publication in refereed journalpeer-review

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Detail(s)

Original languageEnglish
Pages (from-to)240-251
Journal / PublicationEuropean Journal of Operational Research
Volume176
Issue number1
Publication statusPublished - 1 Jan 2007

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 perfected cost-free, the set-up cost can be reduced by investment in flexibility improvement. In this paper, we propose an EPQ model with a flexible and imperfect production process. We formulate this inventory decision problem using geometric programming (GP), establish more general results using the arithmetic-geometric mean inequality, and solve the problem to obtain a closed-form optimal solution. Following the theoretical treatment, we provide a numerical example to demonstrate that GP has potential as a valuable analytical tool for studying a certain class of inventory control problems. Finally we discuss some aspects of sensitivity analysis of the optimal solution based on the GP approach. © 2005 Elsevier B.V. All rights reserved.

Research Area(s)

  • Flexibility, Geometric programming, Process improvement, Quality, Reliability