A two-stage multiproduct EMQ-based model with delayed differentiation and overtime option for common part’s fabrication

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Yuan-Shyi Peter Chiu
Yunsen Wang
Chung-Li Chou
Tiffany Chiu

Abstract

This study explores the two-stage multiproduct economic manufacturing quantity (EMQ)-based system with delayed product differentiation and overtime option for fabrication of common parts. The classic EMQ model determines optimal lot size under assumptions of steady production rate; however, managers of present-day’s manufacturing firms, operating in a highly competitive global business environment, must constantly seeks ways to strengthen their competitive forces, such strategies include: (i) to increase machine utilization through planning multiproduct fabrication; (ii) to evaluate different production schemes to reduce cost, e.g., a delayed differentiation strategy, when a common intermediate product exists in a multiproduct system, wherein all required common parts are manufactured in stage one and final multi-product are produced in the second stage; and (iii) to reduce the cycle time through implementing an overtime strategy. This study is motivated and intended to address the aforementioned real factors. We use mathematical modeling to depict the problem first, then employ the optimization technique to solve it. Our objectives are to not only decide the optimal replenishing policy, but also to explore the effect and joint influence of the postponement and overtime strategy on the optimal policy, machine utilization, system costs, and relevant cost components in the system. Without this in-depth investigation, various crucial information relating to decision making will still be inaccessible to managers in this field.

 

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Article Details

How to Cite
Peter Chiu, Y.-S., Wang, Y., Chou, C.-L., & Chiu, T. (2020). A two-stage multiproduct EMQ-based model with delayed differentiation and overtime option for common part’s fabrication. Journal of Applied Research and Technology, 18(5). https://doi.org/10.22201/icat.24486736e.2020.18.5.1281
Author Biographies

Yuan-Shyi Peter Chiu

Dept. of Industrial Engineering and Management, Chaoyang University of Technology, Taichung, Taiwan

 

Yunsen Wang

School of Accounting, Southwestern University of Finance and Economics, Chengdu, China. 611130

Dept. of Accounting & Information Systems, Rutgers Business School, Newark, NJ 07102, USA

   

Chung-Li Chou

Dept. of Business Administration, Chaoyang University of Technology, Taichung 413, Taiwan

 

Tiffany Chiu

Anisfield School of Business, Ramapo College of New Jersey, Mahwah, NJ, USA