Originally published in the September 1968 RAE issue, this paper describes, illustrating it with exampies, a classical minimum cost model, which finds application in many industrial administration situations, such as: organizational structuring, purchasing, inventory management, scheduling, quality control, maintenance, logistics, product line dimensioning, service leoel and others. In this versatile model, two costs display opposite trends, and the solution for total cost minimization lies somewhere betwen the two extreme possible positions.
Models; production management; cost minimization; decision making