Economic lot sizing in a production system with random demand

Shine Der Lee, Chin Ming Yang, Shu Chuan Lan

Research output: Contribution to journalArticlepeer-review

3 Citations (Scopus)


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
Issue number5
Publication statusPublished - 2016 Apr 3

All Science Journal Classification (ASJC) codes

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

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