An Optimal Batch Size for a Production System Operating Under a Fixed-Quantity, Periodic Delivery Policy

A manufacturing system which procures raw materials from suppliers and processes them to convert to finished products is considered here. This paper develops an ordering policy for raw materials to meet the requirements of a production facility which, in turn, must deliver finished products demanded...

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Bibliographic Details
Published in:The Journal of the Operational Research Society 1994-08, Vol.45 (8), p.891-900
Main Authors: Sarker, Bhaba R., Parija, Gyana R.
Format: Article
Language:English
Subjects:
Batch processing
Business and Management
Capital costs
Carrying costs
Case-Oriented Paper
Case-Oriented Papers
Cost functions
Economic Manufacturing Quantity
Finished goods
Fixed-Quantity Delivery
Inventories
Inventory control
Management
Manufacturing output
Mathematical models
Operations research
Operations Research/Decision Theory
Optimization techniques
Order quantity
Production
Production costs
Production planning
Raw material costs
Raw materials
Shipments
Studies
Citations: Items that cite this one
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Description
Summary:A manufacturing system which procures raw materials from suppliers and processes them to convert to finished products is considered here. This paper develops an ordering policy for raw materials to meet the requirements of a production facility which, in turn, must deliver finished products demanded by outside buyers at fixed interval points in time. First, a general cost model is developed considering both supplier (of raw material) and buyer (of finished products) sides. This model is used to determine an optimal ordering policy for procurement of raw materials, and the manufacturing batch size to minimize the total cost for meeting equal shipments of the finished products, at fixed intervals, to the buyers. The total cost is found to be a piece-wise convex cost function. An interval that contains the optimal solution is first determined followed by an optimization technique to identify the exact solution from this interval.
ISSN:0160-5682
1476-9360
DOI:10.1057/jors.1994.141