Decision Sciences Journal
Volume 31, Number 1
Winter 2000
An Empirical Investigation of Costs in Batching Decisions
Jeffrey L. Rummel
School of Business Administration, University of Connecticut,
368 Fairfield Road, U-41 OPIM, Storrs, CT 06269-2041, email:
jrummel@sba.uconn.edu
ABSTRACT. This paper examines the use of costs and
cost functions to model lot-sizing decisions in batch manufacturing.
The cost functions used to model a wide variety of manufacturing
systems are typically derived from average cost models of unconstrained
inventory problems. The use of setups and average inventories
as the basis for modeling the economics of a typical batch manufacturing
cell is shown to be inadequate. An alternative physical model
that focuses on lead times provides a model that more closely
represents the underlying value of such a cell.
Subject Areas: Lot Sizing and Performance Evaluation. |