Then it can be shown that be g q 1 q q g 2 q q

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: hen it can be shown that: be G (Q) 1 Q * Q = + G* 2 Q Q * 10 Economic Manufacturing Economic Quantity Model (EMQ) Quantity EOQ model states that the items are obtained from an outside supplier. (then the assumption is that entire lot is delivered at the same time) delivered If we want to use EOQ when the units are produced internally, then the assumption is that the production rate is infinite. When the production rate is much larger than demand, EOQ model holds. than However when the production rate is smaller than demand, EOQ model leads to incorrect results. demand, EMQ, Finite Production Rate Suppose that items are produced internally at a rate P > λ. Then the optimal production quantity to minimize Then average annual holding and set up costs has the same form as the EOQ, namely: * Q= 2 Kλ h' Except that h’ iis defined as h’’= h(1- λ/P) s Except h h(1 11 Inventory Levels for Finite Inventory Production Rate Model Production Example 4...
View Full Document

This document was uploaded on 03/23/2014.

Ask a homework question - tutors are online