We develop a model to describe the economic justification of setup time reduction under variable demand. This model extends Trevino's previous model to minimize the total relative cost while demand is variable. Adding the concept of the product's life cycle, we develop a mathematical model dealing with variable demands within the planning horizon. Also, the factor of budget constraint is added to describe the conditions of a different investment amount. Finally, an example is used to demonstrate the workings of the model.
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