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Optimal production run time for two-stage production system with imperfect processes and allowable shortages

W. Pearn, R. Su, M. Weng () and C. Hsu

Central European Journal of Operations Research, 2011, vol. 19, issue 4, 533-545

Abstract: This paper considers a two-stage production system with imperfect processes. Shortages are allowed, and the unsatisfied demand is completely backlogged. In addition, the capital investment in process quality improvement is adopted. Under these assumptions, we first formulate the proposed problem as a cost minimization model where the production run time and process quality are decision variables. Then we develop the criterion for judging whether the optimal solution not only exists but also is unique. If the criterion is not satisfied, the production system should not be opened. An algorithm for the computations of the optimal solutions is also provided. Finally, a numerical example and sensitivity analysis are carried out to illustrate the model. Copyright Springer-Verlag 2011

Keywords: Inventory; Imperfect production process; Quality improvement; Shortages; Two-stage system (search for similar items in EconPapers)
Date: 2011
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DOI: 10.1007/s10100-010-0143-x

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Central European Journal of Operations Research is currently edited by Ulrike Leopold-Wildburger

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