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Optimal reject allowance with constant marginal production efficiency

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  • Avraham Beja

Abstract

A job shop must fulfill an order for N good items. Production is conducted in “lots,” and the number of good items in a lot can be accurately determined only after production of that lot is completed. If the number of good items falls short of the outstanding order, the shop must produce further lots, as necessary. Processes with “constant marginal production efficiency” are investigated. The revealed structure allows efficient exact computation of optimal policy. The resulting minimal cost exhibits a consistent (but not universal) pattern whereby higher quality of production is advantageous even at proportionately higher marginal cost.

Suggested Citation

  • Avraham Beja, 1977. "Optimal reject allowance with constant marginal production efficiency," Naval Research Logistics Quarterly, John Wiley & Sons, vol. 24(1), pages 21-33, March.
    • Handle: RePEc:wly:navlog:v:24:y:1977:i:1:p:21-33
    DOI: 10.1002/nav.3800240103
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    Cited by:

    1. M-C Wu & L-C Huang & H-M Hsu & T-S Su, 2011. "Multiple lot-sizing decisions in a two-stage production with an interrupted geometric yield and non-rigid demand," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 62(6), pages 1075-1084, June.
    2. Abraham Grosfeld‐Nir & Eyal Cohen & Yigal Gerchak, 2007. "Production to order and off‐line inspection when the production process is partially observable," Naval Research Logistics (NRL), John Wiley & Sons, vol. 54(8), pages 845-858, December.

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