The Effects of Inflation and Time Value of Money on a Production Model with a Random Product Life Cycle

2007 ◽  
Author(s):  
Jonas C.P. Yu ◽  
H. M. Wee ◽  
K.J. Wang ◽  
W.C. Chang
Keyword(s):  
Life Cycle ◽  
Product Life Cycle ◽  
Production Model ◽  
Product Life ◽  
Time Value Of Money ◽  
Time Value ◽  
Random Product ◽  
Value Of Money

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

2010 ◽  
Vol 27 (04) ◽  
pp. 437-456 ◽  
Author(s):  
JONAS C. P. YU ◽  
HUI-MING WEE ◽  
GEDE A. WIDYADANA ◽  
JER-YUAN CHANG
Keyword(s):  
Life Cycle ◽  
Product Life Cycle ◽  
Planning Horizon ◽  
Production Model ◽  
Sensitivity Analyses ◽  
Product Life ◽  
Time Value Of Money ◽  
Time Value ◽  
Production Stage ◽  
Value Of Money

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.

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