IDEAS home Printed from https://ideas.repec.org/a/wsi/apjorx/v25y2008i05ns0217595908001948.html
   My bibliography  Save this article

An Economic Production Lot Size For Continuous Decrease In Unit Production Cost

Author

Listed:
  • B. C. OUYANG

    (Department of Industrial Management, Vanung University, Chungli, 32061, Taiwan)

  • H. RAU

    (Department of Industrial Engineering, Chung Yuan Christian University, Chungli, 32023, Taiwan)

Abstract

It is common that prices of raw materials, parts or products decrease significantly after they come onto the market. High technology products are good examples, such as PCs, CPUs, DRAM, and mobile phones. Consequently, the traditional economic production quantity (EPQ) model assuming a constant unit production cost is no longer suitable for today's time-based competition. This study incorporates linearly and exponentially decreasing unit production costs during the mature stage of a product life cycle and presents a mathematical inventory model for production policy. A recursive algorithm is developed to obtain the optimal production schedule and a one-dimension search method is applied to find the optimal number of production cycles. In addition, numerical examples to illustrate the proposed model and its significance with or without considering a continuous reduction in unit production costs for the production policy are discussed as well.

Suggested Citation

  • B. C. Ouyang & H. Rau, 2008. "An Economic Production Lot Size For Continuous Decrease In Unit Production Cost," Asia-Pacific Journal of Operational Research (APJOR), World Scientific Publishing Co. Pte. Ltd., vol. 25(05), pages 673-688.
    • Handle: RePEc:wsi:apjorx:v:25:y:2008:i:05:n:s0217595908001948
    DOI: 10.1142/S0217595908001948
    as

    Download full text from publisher

    File URL: http://www.worldscientific.com/doi/abs/10.1142/S0217595908001948
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://libkey.io/10.1142/S0217595908001948?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wsi:apjorx:v:25:y:2008:i:05:n:s0217595908001948. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Tai Tone Lim (email available below). General contact details of provider: http://www.worldscinet.com/apjor/apjor.shtml .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.