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Note--On the Optimality of Sub-Batch Sizes for a Multi-Stage EPQ Model--A Rejoinder

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  • Andrew Z. Szendrovits

    (McMaster University)

Abstract

Goyal [Goyal, S. K. 1976. Note on `Manufacturing cycle time determination for a multi-stage economic production quantity model'. Management Sci. 23 (3, November) 332-333.] suggests an extension of the EPQ model described in [Szendrovits, A. Z. 1975. Manufacturing cycle time determination for a multi-stage economic production quantity model. Management Sci. 22 (3, November) 298-308.]. His simultaneous optimization of both the lot size (Q) and the number of sub-batches (b) is valid provided that the transportation cost of sub-batches through all stages can be established and that the transportation cost function is of the form he suggests. We should, however, examine the basic nature of transportation costs in a plant and their usual allocation. In practice, any system of transportation equipment and personnel must be designed to cope flexibly with unscheduled activities. The timing of transport operations and the variability in loading the equipment have a great influence on costs. In addition, this transportation system must handle a whole spectrum of products, and it is difficult to allocate the costs of the system to particular product lots. As a consequence, transportation costs in a plant are usually regarded as sunk costs and are treated accordingly in most of the multi-stage inventory models.

Suggested Citation

  • Andrew Z. Szendrovits, 1976. "Note--On the Optimality of Sub-Batch Sizes for a Multi-Stage EPQ Model--A Rejoinder," Management Science, INFORMS, vol. 23(3), pages 334-338, November.
  • Handle: RePEc:inm:ormnsc:v:23:y:1976:i:3:p:334-338
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    File URL: http://dx.doi.org/10.1287/mnsc.23.3.334
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    References listed on IDEAS

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    1. Jacob A. Mincer & Victor Zarnowitz, 1969. "The Evaluation of Economic Forecasts," NBER Chapters,in: Economic Forecasts and Expectations: Analysis of Forecasting Behavior and Performance, pages 3-46 National Bureau of Economic Research, Inc.
    2. N/A, 1962. "Summary," National Institute Economic Review, National Institute of Economic and Social Research, vol. 19(1), pages 3-3, February.
    3. N/A, 1962. "Summary," National Institute Economic Review, National Institute of Economic and Social Research, vol. 20(1), pages 3-3, May.
    4. N/A, 1962. "Summary," National Institute Economic Review, National Institute of Economic and Social Research, vol. 21(1), pages 3-3, August.
    5. J. G. Cragg & Burton G. Malkiel, 1968. "The Consensus And Accuracy Of Some Predictions Of The Growth Of Corporate Earnings," Journal of Finance, American Finance Association, vol. 23(1), pages 67-84, March.
    6. N/A, 1962. "Summary," National Institute Economic Review, National Institute of Economic and Social Research, vol. 22(1), pages 3-3, November.
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    Cited by:

    1. Kimms, Alf & Drexl, Andreas, 1996. "Multi-level lot sizing: A literature survey," Manuskripte aus den Instituten für Betriebswirtschaftslehre der Universität Kiel 405, Christian-Albrechts-Universität zu Kiel, Institut für Betriebswirtschaftslehre.
    2. Kim, J-S. & Kang, S-H. & Lee, S. M., 1997. "Transfer batch scheduling for a two-stage flowshop with identical parallel machines at each stage," Omega, Elsevier, vol. 25(5), pages 547-555, October.
    3. Hoque, M.A., 2011. "An optimal solution technique to the single-vendor multi-buyer integrated inventory supply chain by incorporating some realistic factors," European Journal of Operational Research, Elsevier, vol. 215(1), pages 80-88, November.

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