Replenishment policy for an economic production quantity model considering rework and multiple shipments

  • Abstract
  • Keywords
  • References
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  • Abstract

    Determining the optimal replenishment lot size and shipment policy for a production setup has been of greater interest during the last few years. This paper derives the optimal replenishment lot size and shipment policy for an Economic Production Quantity (EPQ) model with rework of defective items. However, in a real life situation, multi-shipment policy is used in lieu of continuous issuing policy and generation of defective items is inevitable. The proposed research assume that all imperfect quality items are reworked to perfect quality items and then all perfect quality items are delivered to the customers. Mathematical modeling is used in this study and the long-run average production–inventory-delivery cost function is derived. Convexity of the cost function is proved by using the Hessian matrix equations. The closed-form optimal replenishment lot size and optimal number of shipments that minimize the long-run average costs for such an EPQ model are derived.



  • Keywords

    Economic Production Quantity (EPQ) Model; Optimal Replenishment Lot Size; Shipment Policy; Imperfection in Production Process; Backorders.

  • References

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Article ID: 31034
DOI: 10.14419/ijet.v9i3.31034

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