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Flexibility and product diversity in lot-sizing models

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This paper seeks insight into the role of process flexibility and produt variety in the capacitated multiprodcut lotsizing model. The variety of the product line is defined in terms of the number of products, and the relative value of their demand rate, set-up time, and unit cost of production. Process flexibility is defined as a property of operating costs: one process is more flexible than another if an increase in product variety yields a relatively smaller increase in operating costs. In this context, flexibility is seen to depend not only on commonly understood factors, such as set-up time and set-up cost, but also on the capacity of the machine. The analysis yields new insights and formulas for the evaluation of product mix, process design and process improvement decisions. The approach can be viewed as an exercise in sensitivity analysis

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en

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application/pdf

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http://flora.insead.edu/fichiersti_wp/Inseadwp1992/92-05.pdf

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Copyright INSEAD. All rights reserved