The economic production and pricing model with lot-size-dependent production cost

In this paper, the economic production quantity problem for a single-product single-machine system is extended. It is assumed that annual demand of the product is a function of price set by manufacturer. This extension considers sales revenue, inventory and setup costs as well as a variable cost of production which is a function of the lot size. Several linear and non-linear functions of demand and variable cost are considered in this paper and a global solution methodology is presented for the models developed. Newton??s method is used to find local optima and asymptotic convergence of the solution algorithm to a global optimum is proved. Numerical studies followed by a discussion provide additional insights into the problem.     

Optimal production of a three-layer oil stratum

Translated from Issledovaniya po Prikladnoi Matematike, No. 12, pp. 85–91, 1984.     

Modelling the confinement of spilled oil with floating booms

An effective mechanical method of confining the oil spills in an open ocean is to use barriers such as floating booms. However, the confined oil may leak beneath a boom if either the towing speed of the boom or the amount of oil is too large. In this paper a simple mathematical model based on the potential theory is presented for the two-layer (oil and water) flow near a vertical barrier. A set of non-linear integral equations is formulated and solved numerically. For the indirect approach we adopted to solve the non-linear integral equations, the water velocity at the water–oil upstream contact point becomes a determining parameter of the final results. It is shown that the oil leakage under the barrier is impossible if the contact point is a stagnation one. For other non-stagnation cases, we were able to compute flows up to critical Froude numbers beyond which the oil will leak underneath the barrier.     

Minimum concave cost production system: A further generalization of multi-echelon model

We will consider a concave minimization problem associated with a series production system in which raw material is processed inm consecutive facilities. The products at some facility are either sent to the next facility or stocked in the warehouse. The amount of demand for the final products during periodi, i = 1,,n, are known in advance. Our problem is to minimize the sum of processing, holding and backlogging cost, all of which are assumed to be concave.The origin of this model is the classical economic lot size problem of Wagner and Whitin and was extensively studied by Zangwill. This model is very important from the theoretical as well as practical point of view and this is one of the very rare instances in which polynomial time algorithm has been constructed for concave minimization problems.The purpose of this paper is to extend the model further to the situation in which time lag is associated with processing at each facility. We will propose an efficient O(n ⁴ m) algorithm for this class of problems.     

Integrated production and maintenance planning for parallel machine system considering cost of rejection

Production scheduling and maintenance planning have interdependencies but been often considered and optimized independently in practice and in the literature. Furthermore, product quality has direct relationship with maintenance planning. This paper proposes an integrated approach for production scheduling and maintenance planning for parallel machine system considering the effect of cost of rejection. The approach aims to determine optimal production schedule and maintenance plan such that overall operations cost is minimized. A simulation-based optimization approach is used to solve the problem. A numerical investigation is performed to illustrate the approach. The integrated approach shows between 0.6 and 35.8% improvement in term of overall operations cost over independent approach for various scenarios. The results indicate that simultaneous consideration of production scheduling and maintenance planning results into better system performance.     

An analysis of setup cost reduction in a two stage system

This paper investigates the impact of investing in setup cost reduction in a two stage manufacturing process. Closed form relationships are developed for the cases of investment in primary stage setup cost reduction, investment in finishing stage setup cost reduction, and simultaneous investment in setup cost reduction in both stages. Numerical results are presented which compare each of the models to the basic model. These results indicate that when investment in both stages is feasible, it is most effective to simultaneously invest in setup cost reduction. Failing this, the next best alternative is to invest in setup cost reduction in the finishing stage.     

The performance evaluation of a multi-stage JIT production system with stochastic demand and production capacities

This paper discusses a single-item, multi-stage, serial Just-in-Time (JIT) production system with stochastic demand and production capacities. The JIT production system is modeled as a discrete-time, M/G/1-type Markov chain. A necessary and sufficient condition, or a stability condition, under which the system has a steady-state distribution is derived. A performance evaluation algorithm is then developed using the matrix analytic methods. In numerical examples, the optimal numbers of kanbans are determined by the proposed algorithm. The optimal numbers of kanbans are robust for the variations in production capacity distribution and demand distribution.     

Coordinated production and inspection in a tandem system

We study the coordination of production and quality control in a tandem-queue system. There are two stages, with a single server at stage one that can engage in processing an item, or inspecting the produced item, or staying idle; whereas the second stage represents the aggregate of the rest of the production facility. We focus on the optimal control of the first stage, where both the production and inspection times follow general distributions. We formulate a semi-Markov decision program with a long-run average objective, and derive the stationary optimal policy to control and coordinate the production, inspection, and idling processes. We show that there exists a threshold valuei ^–, such that under the optimal policy, once the threshold is reached, production should be suspended at the first stage; and this leads naturally toi ^–+1 being the required buffer capacity between the two stages.Supported in part by NSF Grant MDI-9523029.Supported in part by HKUST Grant DAG95/96.BM52.     

The transmission of a flexural-gravitational wave through several straight obstacles in a floating plate

Periodic wave processes in a thin elastic plate floating on the surface of an incompressible fluid of finite depth are studied. The plate completely covers the fluid surface and executes flexural oscillations under the action of gravitational waves in the fluid. The system of free oscillations in the plate is disrupted along a set of parallel lines. Rigid clamping of the plate, a sliding fastening and an infinitesimally narrow slit are considered as such disruptions. The apparatus used to construct the solution is quite general, and other disruptions in the elastic properties of a plate or its reinforcement, that are realized with linear boundary-contact conditions, can be treated in a similar way. The transmission and reflection of a harmonic flexural-gravitational wave, that is orthogonally incident on the inhomogeneities in the plate, are studied. Exact analytical representations of the wave fields in the plate and in fluid are obtained and the transmission and reflection coefficients for the incident flexural-gravitational wave are determined. The forces developed in the fastenings are found.     

The use of total cost of ownership for strategic procurement: a company-wide management information system

We present a general company-wide management information system for defining procurement strategies. We believe that existing practices for determining purchasing strategies can be improved and a new approach developed. The system uses total cost of ownership information. We argue that mathematical programming models should be used for exploiting this information, when evaluating the firm's strategic procurement options. As an example, we show how we have successfully applied our approach to develop a decision support system at Usinor, a European multinational steel company.     

Design of a production system with a feedback buffer

In this paper, we deal with an M/G/1 Bernoulli feedback queue and apply it to the design of a production system. New arrivals enter a “main queue” before processing. Processed items leave the system with probability 1-p or are fed back with probability p into an intermediate finite “feedback queue”. As soon as the feedback queue is fully occupied, the items in the feedback queue are released, all at a time, into the main queue for another processing. Using transform methods, various performance measures are derived such as the joint distribution of the number of items in each queue and the dispatching rate. We then derive the optimal buffer size which minimizes the overall operating cost under a cost structure. This revised version was published online in June 2006 with corrections to the Cover Date.     

Towards a normative model for inventory cost management in a generalized ABC classification system

This paper establishes a general ABC inventory classification system as the foundation for a normative model of the maintenance cost structure and stock turnover characteristics of a large, multi-item inventory system with constant demand. For any specified number of inventory classes, the model allows expression of the overall system combined ordering and holding cost in terms of (i) the re-ordering frequencies for the items in each inventory class and (ii) the inventory class structure, that is, the proportion of the total system's items that are in each inventory class. The model yields a minimum total maintenance cost function, which reflects the effect of class structure on inventory maintenance costs and turnover. If the Pareto curve (a.k.a. Distribution-by-value function) for the inventory system can be expressed (or approximated) analytically, the model can also be used to determine an optimal class structure, as well as an appropriate number of inventory classes. A special case of the model produces a simply structured, class-based ordering policy for minimizing total inventory maintenance costs. Using real data, the cost characteristics of this policy are compared to those of a heuristic, commonly used by managers of multi-item inventory systems. This cost comparison, expressed graphically, underscores the need for normative modelling approaches to the problem of inventory cost management in large, multi-item systems.     

The behaviour of probabilistic error bounds in floating

In this paper we present a probabilistic approach for the estimation of realistic error bounds appearing in the execution of basic algebraic floating point operations. Experimental results are carried out for the extended product, the extended sum, the inner product of random normalised numbers, the product of random normalised matrices and the solution of lower triangular systems The ordinary and probabilistic bounds are calculated for all the above processes and generally in all the executed examples the probabilistic bounds are much more realistic.     

The time path of the marginal cost of oil: The turning point and the subsequent upward drift

The gradual exhaustion of existing deposits of a depletable non-renewable resource such as oil tends to shift the supply price curve of the resource upwards, increasing its marginal cost. Advances in technologies for exploration and production act as a brake on such upward shifts. Thus, there is a tug-of-war between the gradual exhaustion of existing deposits and technological progress. Using a recently developed constrained least-squares regression technique, we demonstrate that technological progress was the dominant force of the two during the first part of this century, causing a secular drop in marginal costs, but that this situation eventually was reversed, and that the gradual exhaustion of deposits gained the upper hand, causing marginal costs to increase. The turning point occurred around 1971–72. We also discuss the forecasting of the possible current upward drift of marginal costs.     

Optimal scheduling in film production to minimize talent hold cost

The problem of minimizing the cost due to talent hold days in the production of a feature film is considered. A combinatorial model is developed for the sequencing of shooting days in a film shoot. The problem is shown to be strongly NP-hard. A branch-and-bound solution algorithm and a heuristic solution method for large instances of the problem (15 shooting days or more) are developed and implemented on a computer. A number of randomly generated problem instances are solved to study the power and speed of the algorithms. The computational results reveal that the heuristic solution method is effective and efficient in obtaining near-optimal solutions.This research was supported in part by the Natural Sciences and Engineering Research Council of Canada under Grant OPG-0036424. The authors are thankful to two anonymous referees for their helpful comments on an earlier version of this paper.     

Optimum ordering polices with the effect of weather condition,random lead times and salvage cost

In this paper we deal with an optimum ordering policy for a one-unit system with a general lifetime, where the failed unit is scrapped without repair. A spare can only be provided after a lead time. Two kinds of orders (regular and emergency) are possible, each having a different, generally distributed lead time. Weather conditions are subject to a Markov process with two states-normal and abnormal which has a constant rate λ from normal to abnormal weather condition and μ from abnormal to normal respectively. The operational status of the unit is affected by the abnormal weather condition. The costs include downtimes, salvage, penalty, ordering costs. The optimal policy discussed is the one which maximizes the cost effectiveness, and is illustrated with a numerical example     

Optimising production control of a maker-packer system in cigarette manufacture

Many of the current generation of high speed manufacturing machines are fitted with detection systems to monitor the quality of every item produced. Loose end fault and paper damage are two major defects in cigarette manufacturing. It is known that the proportion of defects is related to the cigarette tobacco content. These defects are monitored by a screening variable (tobacco weight) at the making machine and are inspected by an optical device at the packing machine. We investigate the optimal production plan (mean input tobacco weight) and the quality control design (control limits) of a maker-packer production system. The inspection error is considered in the analysis.