AN ECONOMIC PRODUCTION LOT SIZE FOR CONTINUOUS DECREASE IN UNIT PRODUCTION COST

2008 ◽  
Vol 25 (05) ◽  
pp. 673-688 ◽  
Author(s):  
B. C. OUYANG ◽  
H. RAU
Keyword(s):  
Product Life Cycle ◽  
Production Cost ◽  
Recursive Algorithm ◽  
Optimal Number ◽  
Production Costs ◽  
Mature Stage ◽  
Lot Size ◽  
Unit Production Cost ◽  
Economic Production ◽  
Production Policy

It is common that prices of raw materials, parts or products decrease significantly after they come onto the market. High technology products are good examples, such as PCs, CPUs, DRAM, and mobile phones. Consequently, the traditional economic production quantity (EPQ) model assuming a constant unit production cost is no longer suitable for today's time-based competition. This study incorporates linearly and exponentially decreasing unit production costs during the mature stage of a product life cycle and presents a mathematical inventory model for production policy. A recursive algorithm is developed to obtain the optimal production schedule and a one-dimension search method is applied to find the optimal number of production cycles. In addition, numerical examples to illustrate the proposed model and its significance with or without considering a continuous reduction in unit production costs for the production policy are discussed as well.

MINIMALISASI BIAYA SIMPAN DAN BIAYA SETUP PADA MULTIPLE PRODUK: SIMULASI DENGAN CAPACITATED LOT SIZING PROBLEM

2019 ◽  
Vol 4 (2) ◽  
pp. 205-214
Author(s):  
Erika Fatma
Keyword(s):  
Production Cost ◽  
Lot Sizing ◽  
Setup Time ◽  
Production Costs ◽  
Total Production ◽  
Product Cycle ◽  
Lot Size ◽  
Setup Costs ◽  
Lot Sizing Problem ◽  
Capacitated Lot Sizing

Lot sizing problem in production planning aims to optimize production costs (processing, setup and holding cost) by fulfilling demand and resources capacity costraint. The Capacitated Lot sizing Problem (CLSP) model aims to balance the setup costs and inventory costs to obtain optimal total costs. The object of this study was a plastic component manufacturing company. This study use CLSP model, considering process costs, holding costs and setup costs, by calculating product cycle and setup time. The constraint of this model is the production time capacity and the storage capacity of the finished product. CLSP can reduce the total production cost by 4.05% and can reduce setup time by 46.75%.  Keyword: Lot size, CLSP, Total production cost.

scholarly journals The Moderate Operation Scales of Apples Based on Output, Profit, and Unit Production Costs in the Shaanxi Province of China

Land ◽  
2020 ◽  
Vol 9 (1) ◽  
pp. 25
Author(s):  
Congying Zhang ◽  
Qian Chang ◽  
Liqun Shao ◽  
Xuexi Huo
Keyword(s):  
Production Cost ◽  
Cost Model ◽  
Unit Cost ◽  
Production Costs ◽  
Shaanxi Province ◽  
Profit Model ◽  
Unit Production Cost ◽  
Net Profit ◽  
Apple Production ◽  
Moderate Scale

In the Shaanxi province, small and scattered plots impede an increase in the efficiency of apple production. Developing a moderate operation scale is a proper tool to solve inefficiencies in apple production, as it enables improving the factor allocation efficiency, resulting in higher yields, higher profit, or lower production costs. However, the moderate operation scales, based on output, profit, and production costs, may be different. This paper aimed to evaluate the moderate operation scale of apples from three perspectives of increasing yields and profits and reducing unit production cost. The study was based on survey data collected from 661 randomly selected apple farmers in eight counties of the Shaanxi province, China. The collected data were analyzed quantitatively by the input-output model, the net profit model, and unit production cost model. The findings show that: (1) The moderate operation scale oriented to increasing apple yields in the Shaanxi province should be 0.87–1.53 ha. (2) The moderate operation scale oriented to increasing the net profit of farmers in the Shaanxi province should be over 1.53 ha. (3) The moderate operation scale oriented to reducing the unit cost of apple production in the Shaanxi province should be 0.20–0.53 ha. The study provides evidence that policymakers should grasp the balance point and find the intersection of the operation scale based on output, profit, and unit production cost when guiding apple growers to carry out the moderate scale. We propose that 0.87–1.53 ha may be a suitable operation scale for apple production in the Shaanxi province at the current stage.

scholarly journals Optimization of saving production cost in plastic jute sacks with dynamic programming

2018 ◽  
Vol 197 ◽  
pp. 14008
Author(s):  
Rahmi M Sari ◽  
Mangara M Tambunan ◽  
Khalida Syahputri ◽  
Anizar Anizar ◽  
Ikhsan Siregar ◽  
...  
Keyword(s):  
Dynamic Programming ◽  
Production Cost ◽  
Cost Savings ◽  
Production Method ◽  
Optimal Number ◽  
Production Costs ◽  
Market Demand ◽  
Optimal Production ◽  
Jute Sack ◽  
Total Capacity

The plastic jute sack is one of the most popular rice packaging products in the market. One type of plastic jute sack used is LDPE type. The LDPE sacks used for rice packaging often-experiencing fluctuations in market demand. Fluctuating demand is a certain problem for companies in determining the number of production to meet the demand. It can be seen from the frequent over production companies and stock out at each period. Overproduction problem has an impact to increase production costs. Stock resulted in lost sales experienced adversely affected the company, especially from production cost. Based on the problems, the company must immediately performs an optimal production planning to handle various problems in the company. One method for saving the optimal cost production can be used is dynamic programming. This method aims to obtain the optimal number of production accordance to market demand. This research is done to reduce cost by optimizing number of production. Method that used to solve the problem is dynamic programming. By using this method, the company will obtain optimum production number with minimum production cost and considering total capacity available of the company. From the dynamic programming results obtained optimal production number with cost savings about 2.1%.

scholarly journals Replenishment policy for an economic production quantity model considering rework and multiple shipments

2020 ◽  
Vol 9 (3) ◽  
pp. 758
Author(s):  
Usman Ghani ◽  
Mubashir Hayat
Keyword(s):  
Cost Function ◽  
Real Life ◽  
Optimal Number ◽  
Lot Size ◽  
Defective Items ◽  
Economic Production Quantity ◽  
Economic Production ◽  
Long Run ◽  
Epq Model ◽  
Production Quantity

Determining the optimal replenishment lot size and shipment policy for a production setup has been of greater interest during the last few years. This paper derives the optimal replenishment lot size and shipment policy for an Economic Production Quantity (EPQ) model with rework of defective items. However, in a real life situation, multi-shipment policy is used in lieu of continuous issuing policy and generation of defective items is inevitable. The proposed research assume that all imperfect quality items are reworked to perfect quality items and then all perfect quality items are delivered to the customers. Mathematical modeling is used in this study and the long-run average production–inventory-delivery cost function is derived. Convexity of the cost function is proved by using the Hessian matrix equations. The closed-form optimal replenishment lot size and optimal number of shipments that minimize the long-run average costs for such an EPQ model are derived.  

Immaterial Cost and Production: Maximum Production Cost Level Through Marginal Approach

2020 ◽  
Vol 8 (2) ◽  
pp. 128-149
Author(s):  
Dini Maulana Lestari
Keyword(s):  
Quantitative Study ◽  
Marginal Cost ◽  
Production Cost ◽  
Maximum Level ◽  
Production Costs ◽  
Total Production ◽  
Sugar Factory ◽  
Maximum Production ◽  
Cost Approach ◽  
South Sulawesi

This paper will discuss about the immaterial costs and production yields at one of the refined sugar factory companies in Makassar, South Sulawesi. The theory is based on the fact that Immaterial is a cost that is almsgiving, meaning costs that are outside of the basic costs of the company in producing production, so this research aims to find out: (1) what is the production cost needed to produce this production, (2) the maximum level of production at company from 2013 to 2017. This type of research is a quantitative study because it uses a questionnaire in the form of values ​​that are processed using the marginal cost approach formula. The results of the analysis show that (1) the maximum level of production costs occurred in 2016 amounting to 6,912 with an Immaterial cost of Rp. 2,481,796,800 and the total production produced is 359,077.3 tons (2) The required workforce with the total production produced is 359,077.3 tones of 180 people including the maximum production point which means that the lowest value is achieved (optimal).    

PROFITABILITAS USAHA PETERNAKAN AYAM BROILER DENGAN TIPE KANDANG YANG BERBEDA

2020 ◽  
Vol 2 (1) ◽  
Author(s):  
Nurul Mukminah ◽  
Rita Purwasih
Keyword(s):  
Economic Analysis ◽  
Production Cost ◽  
Broiler Chicken ◽  
Production Costs ◽  
Different Types

This study aims to determine and compare the profitability of different types of broiler chicken farms (open and cloused houses) in Subang Regency. This study involved 9 farmers consisting of 5 farmers with closed house and 4 farmers with open house who partnered with PT. Surya Unggas Mandiri (PT. SUM). Production costs taken are 2 production periods from May-August 2018. Data are analyzed using economic analysis and descriptive methods. The results showed that the production cost per period per 1000 birds closed house was higher (Rp. 27.656.768,-) compared to open house (Rp. 24.975.671,-). The revenue per period per 1000 birds of closed house is higher (Rp. 30.606.931,-) compared to open house (Rp. 25.788.618,-). The profit of farmers who use closed house is higher (Rp. 2.621/period/bird) than open house (Rp.417,-). The profitability in close house s is 9.48% and is very feasible to develop

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