کد مقاله | کد نشریه | سال انتشار | مقاله انگلیسی | نسخه تمام متن |
---|---|---|---|---|
481708 | 1446181 | 2008 | 13 صفحه PDF | دانلود رایگان |
![عکس صفحه اول مقاله: Inventory and investment in setup and quality operations under Return On Investment maximization Inventory and investment in setup and quality operations under Return On Investment maximization](/preview/png/481708.png)
In this paper, we construct and analyze a Return On Investment (ROI) maximization model for inventory and capital investment in setup and quality operations under an investment budget constraint. Specifically, we show how such an ROI maximization model can be formulated and derive analytical results such as the conditions under which the inventory is reduced and for the determination of the unique global optimal solution. In addition, by applying the Reformulation-Linearization Technique (RLT), we show via numerical examples how this nonconvex optimization model can be solved effectively and how RLT may produce superior results to those from the conventional Cut Across the Board Rule (CABR). Various managerial insights are provided throughout the paper. For example, as the investment budget increases (or decreases), a fundamental shift of investment strategies (setup cost reduction vs. quality improvement) may be necessary so as to maximize ROI.
Journal: European Journal of Operational Research - Volume 185, Issue 2, 1 March 2008, Pages 593–605