Article ID: | iaor20084349 |
Country: | United Kingdom |
Volume: | 15 |
Issue: | 1 |
Start Page Number: | 87 |
End Page Number: | 101 |
Publication Date: | Jan 2008 |
Journal: | International Transactions in Operational Research |
Authors: | Hariga Moncer, Ben-Daya Mohamed, Khursheed Syed Naveed |
Keywords: | economic order |
Typical models for determining the economic production quantity (EPQ) assume perfect product quality and perfect production processes. Deteriorating processes may affect production systems in several ways. They may decrease the quality of the items produced, cause production stoppage and breakdowns and/or reduce the production rate due to production process inefficiency. The purpose of this paper is to present an EPQ model that incorporates the effect of shifts in production rate on lot sizing decisions due to speed losses. The cycle starts with a certain production rate and after a random time, the production rate shifts to a lower value. A mathematical model to determine the optimal production policy under these conditions is developed and analyzed. Numerical examples are presented for illustrative purposes.