An EPQ Model of MC/MP Mode

MC/MP mode means an enterprise simultaneously implements mass customization (MC) and mass production (MP). The EPQ model of MC/MP mode was studied. The production- inventory cost function is derived for the EPQ model of MC/MP mode, and the total cost includes the holding cost and shortage cost for MP-products, the setup cost, and the item cost of MC- products and MP-products. The economic production quantity and economic production period as well as the maximum on- hand inventory level, maximum shortage level and the minimization total cost were deducted by using the differential calculus techniques. By investigating a numerical example, we show that the optimal values of production interval, economic production quantity and the minimized total cost will increase when the average customization rate increases, but the optimal values of maximum on-hand inventory level and maximum shortage level will increase first and then decrease. The fluctuating of the optimal values will be violence if the average customization rate is nearly up bound, especially in the up bound point. This indicates that the MC/MP enterprise should carry out MC and MP in another mode if the average customization rate increases near to the up bound.