An EOQ-Based Lot Sizing Model with Working Capital Requirements Financing Cost - LS2N - équipe SLP ( Systèmes Logistiques et de Production ) Access content directly
Conference Papers Year : 2021

An EOQ-Based Lot Sizing Model with Working Capital Requirements Financing Cost

Abstract

In time of financial crisis, bank loans are often extremely difficult to obtain for many companies. However, companies always need free cash flow to efficiently react against to any uncertainty. This work demonstrates the impact of financial consequences on operational decisions in the single-product, single-level, infinite capacity EOQ model. We propose an operation-related working capital requirement (WCR) model in a tactical planning context. The classic EOQ model is extended by integrating the WCR financing cost with a cost minimization objective and deriving its analytical solution. Compared with the optimal policy of the classic EOQ model, our approach leads to a new policy with a smaller production lot size due to the new cost trade-offs. Furthermore, an analytical analysis with a classic EOQ-based formula that considers the cost of capital demonstrates the sensitivity of approximating financial costs compared to our exact approach. Finally, sensitivity analysis and numerical examples are also provides.
Fichier principal
Vignette du fichier
520759_1_En_18_Chapter.pdf (427.11 Ko) Télécharger le fichier
Origin : Explicit agreement for this submission
licence : CC BY - Attribution

Dates and versions

hal-03337499 , version 1 (18-07-2023)

Licence

Attribution

Identifiers

Cite

Yuan Bian, David Lemoine, Thomas G. Yeung, Nathalie Bostel, Vincent Hovelaque, et al.. An EOQ-Based Lot Sizing Model with Working Capital Requirements Financing Cost. APMS 2021: IFIP International Conference on Advances in Production Management Systems, Sep 2021, Nantes, France. pp.159-166, ⟨10.1007/978-3-030-85906-0_18⟩. ⟨hal-03337499⟩
64 View
3 Download

Altmetric

Share

Gmail Facebook X LinkedIn More