This article explores two investing problems on the modified economic manufacturing quantity model, where lead time is stochastic and production process employed to manufacture products is imperfect. We first assume that the uncertainty of lead time can be reduced through investment, and the problem is to determine the optimal cycle time, reorder time and lead time variance with objective of minimizing the total related costs. Then, we investigate the effects of simultaneously investing in reducing the lead time variance and setup cost on the operating characteristics of the model. Explicit results of the optimal solutions for decision variables including cycle time, reorder time, lead time variance and setup cost, are derived. Also, two numerical examples are given to illustrate the results.
Discover the world's research
Tamsui Oxford Journal of Mathematical Sciences 16(2), pp.169-185