ENG  Vol.5 No.5 A , May 2013
The Optimal Inventory Policy of Production Management
Abstract
The traditional Economic Production Quantity (EPQ) assumes that the replenishments are instantaneous and the relevant cost only consists of setup cost, stock-holding cost of the finished goods and the purchasing cost of raw materials. As a manager of a manufactory, there is a problem that must be taken into consideration. If the establishment buys all of the raw materials at the beginning, the stock-holding cost for the raw materials should be accounted into the relevant cost. The main purpose of this paper will add the stock-holding cost of raw materials to the EPQ model. Base on this new modified EPQ model, two more useful models are established. One of the new models contains the reusable raw materials instead of the raw materials. The other one considers the stock-holding cost of the raw materials and the imperfect-quality items are considered. We present the optimal cycle length from each of these three models.

Cite this paper
S. Su and S. Lin, "The Optimal Inventory Policy of Production Management," Engineering, Vol. 5 No. 5, 2013, pp. 9-13. doi: 10.4236/eng.2013.55A002.
References

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[3]   K. Richter, “The Extended EOQ Repair and Waste Disposal Model,” International Journal of Production Economics, Vol. 46, No. 1-3, 1996, pp. 443-447. doi:10.1016/0925-5273(95)00143-3

[4]   M. K. Salameh and M. Y. Jaber, “Economic Reduction Quantity Model for Items with Imperfect Quality,” Inter- national Journal of Production Economics, Vol. 64, 2000, pp. 59-64. doi:10.1016/S0925-5273(99)00044-4

 
 
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