A manufacturing lot-sizing model for an infinite horizon incorporating simultaneous productivity and quality learning effects

Economic production quantity (EPQ) models typically rely on a fixed production rate. Nevertheless, this assumption falls short when a factory introduces a new product, switches to new machinery, or adopts a new process; the workers’ learning effect significantly changes the production rate. Thus, we must consider these learning factors when planning production and inventory. To address this, we developed a modified inventory model to determine the best lot size. This new model is based on Jeang’s recent learning-curve theory, which characterizes the learning process in terms of productivity and quality. Productivity and quality are measured by operating time and standard deviation.