IDEAS home Printed from https://ideas.repec.org/a/eee/jomega/v33y2005i1p47-53.html
   My bibliography  Save this article

Joint inventory and technology selection decisions

Author

Listed:
  • Khouja, Moutaz

Abstract

In some manufacturing systems, the type of production technology selected dictates the lot size, or sets an upper limit on it. In this paper, we formulate a model in which the lot sizing decision has to be made at the technology selection stage. Furthermore, the cost of the technology depends on the lot size it can produce. The problem is addressed under two different assumptions about demand. First demand is assumed to be constant. A closed-form expression for the optimal lot size is derived for this case. Second, demand is assumed to be linearly decreasing. Using an accurate approximation to the total cost function, a closed-form expression for the optimal lot size is derived. We illustrate the models with numerical examples.

Suggested Citation

  • Khouja, Moutaz, 2005. "Joint inventory and technology selection decisions," Omega, Elsevier, vol. 33(1), pages 47-53, February.
    • Handle: RePEc:eee:jomega:v:33:y:2005:i:1:p:47-53
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0305-0483(04)00049-0
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Lo, Wen-Yang & Tsai, Chih-Hung & Li, Rong-Kwei, 2002. "Exact solution of inventory replenishment policy for a linear trend in demand - two-equation model," International Journal of Production Economics, Elsevier, vol. 76(2), pages 111-120, March.
    2. Zhao, G. Q. & Yang, J. & Rand, G. K., 2001. "Heuristics for replenishment with linear decreasing demand," International Journal of Production Economics, Elsevier, vol. 69(3), pages 339-345, February.
    3. Hill, Roger M. & Omar, Mohd & Smith, David K., 1999. "Stock replenishment policies for a stochastic exponentially-declining demand process," European Journal of Operational Research, Elsevier, vol. 116(2), pages 374-388, July.
    4. Goyal, S. K. & Giri, B. C., 2003. "A simple rule for determining replenishment intervals of an inventory item with linear decreasing demand rate," International Journal of Production Economics, Elsevier, vol. 83(2), pages 139-142, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Tan, Kim Hua & Noble, James & Sato, Yuji & Tse, Ying Kei, 2011. "A marginal analysis guided technology evaluation and selection," International Journal of Production Economics, Elsevier, vol. 131(1), pages 15-21, May.
    2. Wu, Chin-Chun & Chou, Chao-Yu & Huang, Chikong, 2009. "Optimal price, warranty length and production rate for free replacement policy in the static demand market," Omega, Elsevier, vol. 37(1), pages 29-39, February.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Sicilia, Joaquín & González-De-la-Rosa, Manuel & Febles-Acosta, Jaime & Alcaide-López-de-Pablo, David, 2014. "Optimal policy for an inventory system with power demand, backlogged shortages and production rate proportional to demand rate," International Journal of Production Economics, Elsevier, vol. 155(C), pages 163-171.
    2. Khouja, Moutaz & Goyal, Suresh, 2006. "Single item optimal lot sizing under continuous unit cost decrease," International Journal of Production Economics, Elsevier, vol. 102(1), pages 87-94, July.
    3. Sicilia, Joaquín & González-De-la-Rosa, Manuel & Febles-Acosta, Jaime & Alcaide-López-de-Pablo, David, 2014. "An inventory model for deteriorating items with shortages and time-varying demand," International Journal of Production Economics, Elsevier, vol. 155(C), pages 155-162.
    4. Yang, J. & Zhao, G. Q. & Rand, G. K., 2004. "An eclectic approach for replenishment with non-linear decreasing demand," International Journal of Production Economics, Elsevier, vol. 92(2), pages 125-131, November.
    5. Goyal, S. K. & Giri, B. C., 2003. "A simple rule for determining replenishment intervals of an inventory item with linear decreasing demand rate," International Journal of Production Economics, Elsevier, vol. 83(2), pages 139-142, February.
    6. P. Majumder & U. K. Bera & M. Maiti, 2020. "An EPQ model of substitutable products under trade credit policy with stock dependent and random substitution," OPSEARCH, Springer;Operational Research Society of India, vol. 57(4), pages 1205-1243, December.
    7. J. B. G. Frenk & Sonya Javadi & Semih O. Sezer, 2019. "An optimal stopping approach for the end-of-life inventory problem," Mathematical Methods of Operations Research, Springer;Gesellschaft für Operations Research (GOR);Nederlands Genootschap voor Besliskunde (NGB), vol. 90(3), pages 329-363, December.
    8. van Jaarsveld, Willem & Dekker, Rommert, 2011. "Estimating obsolescence risk from demand data to enhance inventory control--A case study," International Journal of Production Economics, Elsevier, vol. 133(1), pages 423-431, September.
    9. J P J van Kooten & T Tan, 2009. "The final order problem for repairable spare parts under condemnation," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 60(10), pages 1449-1461, October.
    10. Dey, Jayanta Kumar & Kar, Samarjit & Kumar Bhuina, Ashok & Maiti, Manoranjan, 2006. "Inventory of differential items selling from two shops under a single management with periodically increasing demand over a finite time-horizon," International Journal of Production Economics, Elsevier, vol. 100(2), pages 335-347, April.
    11. Sarkar, Biswajit & Saren, Sharmila & Wee, Hui-Ming, 2013. "An inventory model with variable demand, component cost and selling price for deteriorating items," Economic Modelling, Elsevier, vol. 30(C), pages 306-310.
    12. Omar, Mohd, 2009. "An integrated equal-lots policy for shipping a vendor's final production batch to a single buyer under linearly decreasing demand," International Journal of Production Economics, Elsevier, vol. 118(1), pages 185-188, March.
    13. Bylka, S.Stanislaw & Rempala, Ryszarda, 2004. "Heuristics for impulse replenishment with continuous periodic demand," International Journal of Production Economics, Elsevier, vol. 88(2), pages 183-190, March.
    14. Wu, Kan & Yuan, Xue-Ming, 2016. "Optimal production-inventory policy for an integrated multi-stage supply chain with time-varying demandAuthor-Name: Zhao, Shi Tao," European Journal of Operational Research, Elsevier, vol. 255(2), pages 364-379.
    15. Chuang, Chia-Hung & Chiang, Chung-Yean, 2016. "Dynamic and stochastic behavior of coefficient of demand uncertainty incorporated with EOQ variables: An application in finished-goods inventory from General Motors׳ dealerships," International Journal of Production Economics, Elsevier, vol. 172(C), pages 95-109.
    16. Sun, Zhongmiao & Xu, Qi & Liu, Jinrong, 2021. "Pricing and replenishment decisions for seasonal and nonseasonal products in a shared supply chain," International Journal of Production Economics, Elsevier, vol. 233(C).
    17. van Jaarsveld, W.L., 2010. "Estimating obsolescence risk from demand data - a case study," Econometric Institute Research Papers EI 2010-03, Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute.
    18. Amaya, Ciro Alberto & Carvajal, Jimmy & Castaño, Fabian, 2013. "A heuristic framework based on linear programming to solve the constrained joint replenishment problem (C-JRP)," International Journal of Production Economics, Elsevier, vol. 144(1), pages 243-247.
    19. Rau, H. & OuYang, B.C., 2008. "An optimal batch size for integrated production-inventory policy in a supply chain," European Journal of Operational Research, Elsevier, vol. 185(2), pages 619-634, March.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jomega:v:33:y:2005:i:1:p:47-53. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/375/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.