Effect of shortage level constraint on finite production rate model with rework
نویسندگان
چکیده
Long run average costs for finite production rate model with backlogging is less than or equal to that of the same model without backlogging. An equation for calculating intangible backorder cost is proposed for situation when required service level is not attainable. By incorporating this intangible backorder cost in mathematical analysis, one can derive a new optimal lot-size policy that minimizes expected total costs as well as satisfies the shortage level constraint.
منابع مشابه
Solving an Epq Model with Rework and Service Level Constraint
This paper examines an economic production quantity (EPQ) model with rework and service level constraint. First, we prove that the expected overall costs for an imperfect EPQ model with backlogging permitted is less than or equal to that of the one without backlogging. Secondly, the relationship between “imputed backorder cost” and maximal shortage level is derived for decision-making on whethe...
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