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The Multi-Item Setup-Reduction Investment-Allocation Problem with Continuous Investment-Cost Functions

Author

Listed:
  • John P. Leschke

    (The McIntire School of Commerce, University of Virginia, Charlottesville, Virginia 22903-2493)

  • Elliott N. Weiss

    (The Darden School, University of Virginia, Charlottesville, Virginia 22903-2493)

Abstract

In this note, we analyze investment priorities for setup-reduction programs in a multi-product system. We provide an objective function transformation for the model developed by Porteus (Porteus, E. L. 1985. Investing in reduced setups in the EOQ model. Management Sci. 31(8, August) 998--1010.) that permits the use of marginal analysis in both the single- and multiple-item problems. For the multiple-item problem, we show that managers should not reduce the setup for each product to its optimum in sequential order. This is in contrast to recommendations found in the existing literature.

Suggested Citation

  • John P. Leschke & Elliott N. Weiss, 1997. "The Multi-Item Setup-Reduction Investment-Allocation Problem with Continuous Investment-Cost Functions," Management Science, INFORMS, vol. 43(6), pages 890-894, June.
    • Handle: RePEc:inm:ormnsc:v:43:y:1997:i:6:p:890-894
    DOI: 10.1287/mnsc.43.6.890
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    Citations

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    Cited by:

    1. Cho, Richard K. & Gerchak, Yigal, 2005. "Supply chain coordination with downstream operating costs: Coordination and investment to improve downstream operating efficiency," European Journal of Operational Research, Elsevier, vol. 162(3), pages 762-772, May.
    2. Lee, Hsu-Hua, 2008. "The investment model in preventive maintenance in multi-level production systems," International Journal of Production Economics, Elsevier, vol. 112(2), pages 816-828, April.
    3. Darwish, M.A., 2008. "EPQ models with varying setup cost," International Journal of Production Economics, Elsevier, vol. 113(1), pages 297-306, May.
    4. Giri, B. C. & Moon, I., 2004. "Note on an economic lot scheduling problem under budgetary and capacity constraints," International Journal of Production Economics, Elsevier, vol. 91(3), pages 229-234, October.
    5. Diaby, Moustapha, 2000. "Integrated batch size and setup reduction decisions in multi-product, dynamic manufacturing environments," International Journal of Production Economics, Elsevier, vol. 67(3), pages 219-233, October.
    6. Li, Jie & Jo Min, K. & Otake, Toshitsugu & Van Voorhis, Timothy, 2008. "Inventory and investment in setup and quality operations under Return On Investment maximization," European Journal of Operational Research, Elsevier, vol. 185(2), pages 593-605, March.
    7. Gong, Qiguo & Chen, Guohui & Zhang, Wen & Wang, Hui, 2022. "The role of humans in flexible smart factories," International Journal of Production Economics, Elsevier, vol. 254(C).

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