Abstract:
The traditional production lot size model assumes that the production process
consists of a single stage and the only costs used to determine the optimal lot size are
the setup cost and the holding cost of the finished product.
This research extends the production lot size model to a multistage mutlicycle
production process that accounts for the various costs involved in the production of
an item. Mathematical models are developed and closed form formulas for
determining the optimal lot size are obtained. The uniqueness of the optimal solution
is demonstrated and numerical examples are given to illustrate and analyze the
model. In chapter one, a background on inventory models is presented and a literature
review is given. Chapter two is about reviewing the classical EOQ and EPQ models
in addition to two models developed recently by Salemeh & EI-Kassar and El-Kassar
& Dah. The two models account for the holding cost of raw material and the effect of
time discounting. In chapter three, the production lot size model is extended to a
multistage production process that accounts for the various costs involved in the
production of an item. In chapter four, the multistage model is generalized to a model
where each stage of production contains more than one cycles of the subsequent
stages. In chapter five, a conclusion is given and some future research topics are
proposed.
