Abstract
An inventory model of a "volume flexible manufacturing system" for a deteriorating
item is developed, taking a stock-dependent demand rate. It is assumed that the
demand rate remains stock-dependent for an initial period after which a uniform
demand rate follows as the stock comes down to a certain level.
The unit production cost is taken to be a function of the finite production rate
which is treated to be a decision variable. The mathematical expression for the
"average profit function" is derived and it is maximized subject to the different
constraints of the system using Zoutendijk's Method of constrained optimization,
the algorithm of which is given. The solution procedure is illustrated with the
help of a numerical example. Using the result of the example, sensitivity of the
near optimal solution to changes in the values of the parameters of the system
is analyzed.
Keywords: Volume flexible manufacturing system; deteriorating item;
stock-dependent demand rate; constrained optimization; sensitivity analysis.
|