The Effect of Variable Demand and Production
|關鍵字:||經濟製造批量;折扣現金流量;需求;生產;economic manufacturing quantity;discounted cash flow;demand;production|
In the existing literature of classical Economic Manufacturing Quantity (EMQ) models, the rate of production and demand is assumed to be constant. In practice, it has been observed that in many situations, the production rate may go up or down with the demand rate. Similarly, the production may be influenced by the on-hand inventory, namely the production rate may play an opposite role when the on-hand inventory level increases or decreases. This research studies the concept of a product life cycle. Three situations of the market demand patterns, i.e., growth, maturity and decline, are considered. Previous studies have been based on the assumption that the time value of money is negligible during a production run. However, interest rates currently are not low and the planning horizon may or may not be short. Production inventory policies obviously affect profitability and any particular policy choice depends upon relative profitability. Therefore, this study attempts to develop various production policies which consider the effects of production, demand, inventory and the discounted cash flow (DCF). More specifically, the objectives of this research are: (1) Develop a production inventory model by assuming the production rate to be dependent on both on-hand inventory and demand. (2) Develop a production inventory model by considering three situations of the market demand patterns, i.e., growth, maturity and decline. (3) Present a more general model where the inventory is deteriorating at a constant rate. (4) Develop the optimal production inventory policies for a finite production time taking account of time value. Optimal expressions are obtained for the production-scheduling period, resulting in a minimization of the expected average cost per unit time. Finally, numerical examples are given to illustrate the proposed methods’ effectiveness.