Deterministic economic production quantity models with time-varying demand and cost |
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Institution: | 1. Department of Marketing and Management Sciences, Cot Sakos College of Business, The William Paterson University of New Jersey, Wayne, NJ 07470, USA;2. Graduate Institute of Management Sciences, Tamkang University, Tamsui, Taipei 25137, Taiwan, R.O.C.;3. Department of Statistics, Tamkang University, Tamsui, Taipei 25137, Taiwan, R.O.C. |
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Abstract: | In today’s time-based competition, the unit cost of a high-tech product declines significantly over its short product life cycle. Consequently, in this paper, we relax the traditional economic production quantity model to allow for time-varying cost. We then prove that the optimal production schedule uniquely exists. In addition, we also show that the total cost is a convex function of the number of replenishments, which reduces the search for the optimal solution to finding a local minimum. Furthermore, we characterize the influences of both demand and cost over the length of production run time and the economic production quantity. |
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