Note---Can a Reduction in Set Up Costs Indeed Increase Total Costs?

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.

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Year of publication:	1988
Authors:	Gerchak, Yigal
Published in:	Management Science. - Institute for Operations Research and the Management Sciences - INFORMS, ISSN 0025-1909. - Vol. 34.1988, 10, p. 1271-1272
Publisher:	Institute for Operations Research and the Management Sciences - INFORMS
Subject:	inventory/production: zero inventory \| facilities/equipment: planning \| inventory/production: parametric analysis

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Extent:	application/pdf
Type of publication:	Article
Other identifiers:	10.1287/mnsc.34.10.1271 [DOI]
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10009197928