Note—Can a Reduction in Set Up Costs Indeed Increase Total Costs?
- 1 October 1988
- journal article
- Published by Institute for Operations Research and the Management Sciences (INFORMS) in Management Science
- Vol. 34 (10) , 1271-1272
- https://doi.org/10.1287/mnsc.34.10.1271
Abstract
Zangwill (Zangwill, W. I. 1987. From EOQ towards ZI. Management Sci. 33 1209--1223.) has constructed an example which purports to show that reducing set up costs can increase total cost. We show that this happened as a result of restricting the policies to be of a "greedy" nature. The expected cost of truly optimal policies is shown not to increase.inventory/production: zero inventory, facilities/equipment: planning, inventory/production: parametric analysisKeywords
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