From EOQ Towards ZI

Willard I. Zangwill
Additional contact information
Willard I. Zangwill: Graduate School of Business, University of Chicago, Chicago, Illinois 60637

Management Science, 1987, vol. 33, issue 10, 1209-1223

Abstract: Zero Inventory (ZI) is a new and powerful concept to improve production efficiency. Underpinning ZI is set up reduction and this paper examines what eventuates when set up costs are cut. The folklore is that set up reduction lowers inventory and costs. We obtain results contrary to that. Reducing set up costs need not reduce inventory, for example. Likewise lowering set up costs need not necessarily lower total production and inventory costs. Furthermore, most investments produce marginally decreasing returns. Set up cost reduction prompts the opposite; it produces marginally increasing (not decreasing) returns. A parametric algorithm that calculates the benefit of set up cost reduction is provided. Most presentations of ZI have been descriptive with very few mathematical models of it yet untaken. By modeling certain ZI concepts mathematically, we scrutinize their validity and sometimes invalidity.

Keywords: inventory/production: zero inventory; facilities/equipment: planning; inventory/production: parametric analysis (search for similar items in EconPapers)
Date: 1987
References: Add references at CitEc
Citations: View citations in EconPapers (23)

Downloads: (external link)
http://dx.doi.org/10.1287/mnsc.33.10.1209 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:33:y:1987:i:10:p:1209-1223

Access Statistics for this article

More articles in Management Science from INFORMS Contact information at EDIRC.
Bibliographic data for series maintained by Chris Asher ().