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A piecewise nonlinear optimization for a production-inventory model under maintenance, variable setup costs, and trade credits

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  • Yu-Chung Tsao

Abstract

This study investigates a production-inventory model considering system maintenance, variable setup costs, and trade credits. In production systems, manufacturers usually carry out system maintenance when systems are in an out-of-control state. We also consider setup costs because these costs may decrease over time, for example, when manufacturers effectively improve production efficiency because of the effect of the learning curve. The model considers trade credits because suppliers commonly provide credit periods to manufacturers. This study determines the optimal replenishment frequencies that minimize total costs. We provide lemmas for optimality, develop a piecewise nonlinear optimization algorithm to solve the problems described, and verify the model using a practical case in the automotive parts industry. Based on numerical experiments, we discuss how system parameters affect the decision behaviors of manufacturers. The results of this study can serve as references for business managers and administrators. Copyright Springer Science+Business Media New York 2015

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  • Yu-Chung Tsao, 2015. "A piecewise nonlinear optimization for a production-inventory model under maintenance, variable setup costs, and trade credits," Annals of Operations Research, Springer, vol. 233(1), pages 465-481, October.
    • Handle: RePEc:spr:annopr:v:233:y:2015:i:1:p:465-481:10.1007/s10479-013-1507-0
    DOI: 10.1007/s10479-013-1507-0
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    7. Yu-Chung Tsao, 2010. "Two-phase pricing and inventory management for deteriorating and fashion goods under trade credit," Mathematical Methods of Operations Research, Springer;Gesellschaft für Operations Research (GOR);Nederlands Genootschap voor Besliskunde (NGB), vol. 72(1), pages 107-127, August.
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    Cited by:

    1. Amir Hossein Nobil & Amir Hosein Afshar Sedigh & Leopoldo Eduardo Cárdenas-Barrón, 2020. "A multiproduct single machine economic production quantity (EPQ) inventory model with discrete delivery order, joint production policy and budget constraints," Annals of Operations Research, Springer, vol. 286(1), pages 265-301, March.
    2. Vu Thi Huong & Jen-Chih Yao & Nguyen Dong Yen, 2017. "On the Stability and Solution Sensitivity of a Consumer Problem," Journal of Optimization Theory and Applications, Springer, vol. 175(2), pages 567-589, November.
    3. Yu-Chung Tsao & Qinhong Zhang & Hui-Ping Fang & Pei-Ling Lee, 2019. "Two-tiered pricing and ordering for non-instantaneous deteriorating items under trade credit," Operational Research, Springer, vol. 19(3), pages 833-852, September.

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