The economic production lot size model under volume flexibility

The classical economic production lot size (EPL) model assumes a predetermined and inflexible production rate. Production rate in many cases, such as orders filled by a machine, can be changed. Moreover, unit production cost depends on production rate. In this chapter, the EPL model is extended to cases where production rate is a decision variable. Unit production cost becomes a function of production rate. The proposed model is solved for special unit production cost functions and the results illustrated with a numerical example.