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Advances in Management & Applied Economics, , , 2012, 179-189. ISSN: 1792-7544 (print version), 1792-7552 (online). International Scientific Press, 2012. Analysis of a Production Order Quantity Model with Declining Unit Cost Rod D. Raehsler1, Yifan Zhao2, Chin W. Yang3, Soong N. Sohng4, Paul Kim5 and Ken Hung6. Abstract This paper improves upon the existing literature surrounding the Production Order Quantity inventory Model in which unit cost and daily Production are assumed to be constant. By including economies of scale into the Model , we examine its impact on Production Order Quantity and total cost. The results suggest that the minimal cost solution derived from the Production Order Quantity Model needs to 1. Department of Economics, Clarion University of Pennsylvania, Clarion PA 16214, e-mail: * Corresponding author.
180 Analysis of a Production Order Quantity Model ... balance out holding, setup and production costs. As a result, a smaller inventory
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