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Optimal Strategies for Investment in Setup Cost Reductions in a Just-in-Time Environment

  • David F. Rogers
Conference paper
Part of the Lecture Notes in Economics and Mathematical Systems book series (LNE, volume 332)

Abstract

Setup cost reductions in a Just-In-Time environment typically allow for reduced inventories, increased capacity, and greater flexibility because of the resulting reduced lot sizes. This study is a detailed analysis of investing in a one-time cost to reduce the setup cost (and time) in the classical (Wilson) economic order quantity lot-size model. A present value approach is employed and the number of periods required to recoup the initial investment is derived.

Keywords

Cash Flow Concave Function Order Quantity Setup Cost Economic Order Quantity 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Copyright information

© Springer-Verlag New York, Inc. 1989

Authors and Affiliations

  • David F. Rogers
    • 1
  1. 1.Department of Quantitative Analysis and Information Systems College of Business AdministrationUniversity of CincinnatiCincinnatiUSA

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