Note on cost minimization for a multi-product fabrication- distribution problem with commonality, postponement and quality assurance

Abstract

A multiproduct fabrication-shipment problem with postponement and quality reassurance was explored (Chiu et al., 2016) to minimize overall relevant system costs, in which the differential calculus was utilized in the optimization procedure to help decide the optimal fabrication-distribution policy. This research note presents a two-phase algebraic approach, in lieu of their derivatives, to find the optimal policy to the problem. Such a simplified method aims at helping managers or practitioners in the field to understand and solve the problem more effectively, and without derivatives.