OPTIMAL REJECT ALLOWANCE WITH CONSTANT MARGINAL PRODUCTION EFFICIENCY.

Research output: Contribution to journalArticlepeer-review

Abstract

A job shop must fulfill an order for N good items. Production is conducted in ″lots″ , and the number of good items in a lot can be accurately determined only after production of that lot is completed. If the number of good items falls short of the outstanding order, the shop must produce further lots, as necessary. Processes with ″constant marginal production efficiency″ are investigated. The revealed structure allows efficient exact computation of optimal policy. The resulting minimal cost exhibits a consistent (but not universal) pattern whereby higher quality of production is advantageous even at proportionately higher marginal cost.

Original languageEnglish
Pages (from-to)21-33
Number of pages13
JournalNaval Research Logistics
Volume24
Issue number1
DOIs
StatePublished - 1977

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