Model of economic batch size in industrial production

Abstract

This paper describes one approach to optimization of a batch size in industrial production. The paper focuses on the formation of a generally applicable optimization model that allows finding of the most economical size of production batch. Determining of the optimal size of the batch was done by analyzing the cost structure with the requirement for minimizing production costs reduced to a product. The paper illustrates a concrete example of this approach by using the cutting tools production as an example. It demonstrates the importance of the influence of size on the batch production costs reduced to a piece as a product unit. It discusses and explains variations that can occur in these calculations. In addition, it demonstrates the importance of determining the optimal batch size, both in theory and in practice, and then the impact on cost.