Models for a family of products with shelf life, and production and shortage costs in emerging markets

  • Authors:

  • Yi Xu;Bhaba R. Sarker

  • Affiliations:

  • Department of Industrial and Manufacturing System Engineering, Louisiana State University, Baton Rouge, LA;Department of Industrial and Manufacturing System Engineering, Louisiana State University, Baton Rouge, LA

  • Venue:
  • Computers and Operations Research - Special issue: Emerging economics
  • Year:
  • 2003

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Abstract

Many industrial products have very short life cycles as well as shelf-life constraints. Shelf-life does not necessarily reflect the physical condition of a product, it may reflect the productive or marketable life of a product as well in a competitive emerging market. In this paper, a production system that produces a family of items is considered and its policy is to produce all the items in every production cycle. A model is developed to incorporate the effects of constituent costs such as production cost, holding cost, setup cost, and shortage cost, which are four major costs in a typical inventory system with a shelf-life constraint. By using this model, a proper decision is reached to choose one of the three options: reduction of production rate, reduction of cycle time to avoid the violation of shelf-life constraint and adjusting to both of them simultaneously. An example is framed out to illustrate the mechanism of the models and a comparison between the proposed models with two previous models is also presented.