Product Production Decision Model Based on Cost Minimization

Abstract

To achieve maximum profit, controlling costs during the production process has become a top priority in enterprise production planning. A certain enterprise needs to manufacture and sell a finished product by purchasing different spare parts and assembling them in order to produce an electronic product. This article establishes a product production decision model based on cost minimization, which helps enterprises make the most reasonable production decisions and achieve maximum profits. This article establishes a decision-making model for the sampling and testing plan of spare parts based on hypothesis testing method. According to the central limit theorem in statistics, the original distribution is followed when the sample size is small, while the normal approximation can be used instead of the original distribution when the sample size is large. The calculation result is as follows: In (1), if the sample size n=29, the enterprise should reject this batch of spare parts when the number of defective products reaches 6; If the sample size n=1000, the enterprise should reject this batch of spare parts when the number of defective products reaches 116. In (2), if the sample size n=29, the enterprise should reject this batch of spare parts when the number of defective products reaches 5; If the sample size n=1000, the enterprise should reject this batch of spare parts when the number of defective products reaches 113.This article transforms the problem of maximizing final net profit into the problem of minimizing final cost value, and establishes a product production decision model based on the minimum cost value. This article mathematizes the five decision points that exist in the production process and sets corresponding variable decision variables n=1,2,..., 5, x_n values of 1 or 0 to express whether the decision is to be executed or not. After obtaining all decision options through enumeration, calculate the cost value corresponding to each option, and take the decision option corresponding to the lowest cost value as the best decision option in this situation.