Economic lot sizing in a production system with random demand

Shine-Der Lee, Chin Ming Yang, Shu Chuan Lan

Research output: Contribution to journalArticle

3 Citations (Scopus)

Abstract

An extended economic production quantity model that copes with random demand is developed in this paper. A unique feature of the proposed study is the consideration of transient shortage during the production stage, which has not been explicitly analysed in existing literature. The considered costs include set-up cost for the batch production, inventory carrying cost during the production and depletion stages in one replenishment cycle, and shortage cost when demand cannot be satisfied from the shop floor immediately. Based on renewal reward process, a per-unit-time expected cost model is developed and analysed. Under some mild condition, it can be shown that the approximate cost function is convex. Computational experiments have demonstrated that the average reduction in total cost is significant when the proposed lot sizing policy is compared with those with deterministic demand.

Original languageEnglish
Pages (from-to)1142-1154
Number of pages13
JournalInternational Journal of Systems Science
Volume47
Issue number5
DOIs
Publication statusPublished - 2016 Apr 3

Fingerprint

Lot Sizing
Production Systems
Economics
Costs
Shortage
Renewal Reward Process
Setup Cost
Cost Model
Depletion
Computational Experiments
Batch
Immediately
Cost Function
Cycle
Cost functions
Unit
Demand
Experiments
Model

All Science Journal Classification (ASJC) codes

  • Control and Systems Engineering
  • Theoretical Computer Science
  • Computer Science Applications

Cite this

Lee, Shine-Der ; Yang, Chin Ming ; Lan, Shu Chuan. / Economic lot sizing in a production system with random demand. In: International Journal of Systems Science. 2016 ; Vol. 47, No. 5. pp. 1142-1154.
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Economic lot sizing in a production system with random demand. / Lee, Shine-Der; Yang, Chin Ming; Lan, Shu Chuan.

In: International Journal of Systems Science, Vol. 47, No. 5, 03.04.2016, p. 1142-1154.

Research output: Contribution to journalArticle

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