Optimal production policy for an item with shortages and increasing time-varying demand

Optimal production policy for an item with shortages and increasing time-varying demand

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Article ID: iaor19971243
Country: United Kingdom
Volume: 47
Issue: 9
Start Page Number: 1175
End Page Number: 1183
Publication Date: Sep 1996
Journal: Journal of the Operational Research Society
Authors:
Keywords: production
Abstract:

A new production-inventory model is developed for an item with increasing time-varying demand during a finite planning period. The paper assumes that shortages are fully backordered, and the cost of adjusting the production rate depends on the magnitude of the change in the production rate. The objective is to find the optimal policy of adjusting the production rate in order to minimize the total system cost. A solution procedure is presented and a numerical example is provided for the special case of linearly increasing demand.

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