Production and Operations Management Consulting.
Economic production quantity
|TP||optimum oder cycle = Qopt/demand rate|
|s||fixed ordering cost|
|Qopt||optimum order quantity|
- 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.
- Nahmias (1997)