Economic production quantity
The optimum production quantity formula for non-instantaneous production is
evaluated.
Symbols:
| Bmax |
maximum
inventory |
| TP |
optimum
oder cycle = Qopt/demand rate |
| h |
holding
cost |
| s |
fixed
ordering cost |
| D |
demand
rate |
| Qopt |
optimum
order quantity |
Assumptions:
- continuous
stationary demand
- finite
production rate
- no
quantity discounts
- no
backorders
- any
order quantity > 0 is allowed
The problem is equivalent
to the classical order quantity with
the additional consideration of a finite production
rate.
This model can be extended to the economic lot sizing
and scheduling problem (ELSP) with common
production cycle.
Literature:
- Nahmias
(1997)
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