Economic production cycles and setup reduction in an imperfect production system

摘要

To consider an economic production quantity model with imperfect production processes where setup cost is a function of capital expenditure. A mathematical model is derived to determine the optimal production run length and investment in setup cost reduction in such a way that the total cost per unit time is minimized and an efficient algorithm is provided to find the optimal production run length and setup cost. A numerical example is used to illustrate the results and to assess cost savings realized by adopting investment strategy.