1 Department of Business Studies, Aarhus School of Business, Aarhus BSS, Aarhus University2 CORAL - Centre for Operations Research Applications in Logistics, Aarhus School of Business, Aarhus BSS, Aarhus University3 Department of Economics and Business Economics, Aarhus BSS, Aarhus University4 Department of Economics and Business Economics, Aarhus BSS, Aarhus University
We study an extension of the economic production lot size model, where more than one production rate can be used during a cycle. The production rates and their corresponding runtimes are decision variables. We decompose the problem into two subproblems. First, we show that all production rates should be chosen in the interval between the demand rate and the production rate, which minimize unit production costs, and should be used in an increasing order. Then, given the production rates, we derive closed form solutions for the optimal runtimes as well as the minimum average cost. Finally we derive a near-optimal solution to the general problem.
Production Planning; Optimization
Main Research Area:
IFORS 2002. The sixteenth triennial conference of the International Federation of Operational Research Societies, Edinburgh, UK