The effect of the stabilization period on the economic lot scheduling problem

The Economic Lot Scheduling Problem (ELSP) is the problem of scheduling pro duction of several items in a single facility, so that demands are met with out stockouts or backorders, and the long run average inventory carrying an d setup costs are minimized. One of the general assumptions in the ELSP is that the yield rates of a given manufacturing process are constant, or 100% , after setup. However, this assumption may not be true for certain manufac turing processes, in which the yield rates are quite low just after setup, and then increase over time. This period is called a stabilization period a nd yield rates gradually increase during this period until they reach the t arget rates, which are set empirically or strategically. The purpose of thi s paper is to clarify the effect of the stabilization period by applying th e stabilization period concept to the ELSP, which has been widely applied t o many production systems. In this paper, the problem is tackled in three s tages: Firstly, we formulate a model and develop an algorithm, which provid es a lower bound for a minimum cost. Secondly, we develop a heuristic proce dure using the time-varying lot size approach. Finally, we solve a special case of the ELSP to rnd an upper bound using the common cycle approach.