A method for the consideration of learning effects in EPQ model with backorders is presented. The optimum values of Economic Production Quantity and maximum Backorder level permitted are found by solving two simultaneous equations. The partial derivat...
A method for the consideration of learning effects in EPQ model with backorders is presented. The optimum values of Economic Production Quantity and maximum Backorder level permitted are found by solving two simultaneous equations. The partial derivatives of economic production quantity function and maximum backorder level function with respect to several parameters are found. Several parameters are demand rate in units per year, production rate in units per year, the slope parameter of the learning curve, annual inventory carrying cost rate, backorder cost per unit short per year, production set-up cost, and current cummulative production quantity.
This paper concludes that the method for the consideration of learning effects is better than the solution for the conventional EPQ model within a labor-intensive production system.