THE EFFECTS OF INFLATION AND TIME VALUE OF MONEY ON A PRODUCTION MODEL WITH A RANDOM PRODUCT LIFE CYCLE

Jonas C. P. Yu, Hui-Ming Wee (), Gede A. Widyadana and Jer-Yuan Chang
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Jonas C. P. Yu: Logistics Management Department, Takming University of Science and Technology, Taipei, 114, Taiwan, ROC
Hui-Ming Wee: Department of Industrial and Systems Engineering, Chung Yuan Christian University, Chungli, 32023, Taiwan, ROC
Gede A. Widyadana: Department of Industrial and Systems Engineering, Chung Yuan Christian University, Chungli, 32023, Taiwan, ROC
Jer-Yuan Chang: Department of Biotechnology, Yung-Ta Institute of Technology, Ping-Tung, Taiwan, ROC

Asia-Pacific Journal of Operational Research (APJOR), 2010, vol. 27, issue 04, 437-456

Abstract: In Moon and Lee's model (2000), they developed a finite planning horizon economic order quantity (EOQ) model with time value of money and inflation. This paper extends Moon and Lee's model to examine a production system with a random life cycle. Two conditions are discussed: the first is when the product life cycle ends in the production stage and the second is when the product life cycle ends in the non-production stage. We develop an algorithm to derive the optimal period time and expected total cost. Numerical examples and sensitivity analyses are given to validate the results of the production model.

Keywords: Time-value of money; inflation; production system; product life cycle (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:wsi:apjorx:v:27:y:2010:i:04:n:s0217595910002788

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DOI: 10.1142/S0217595910002788

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