Optimal EPQ Model with Imperfect Items, Rework, Scrap, and Backorder

摘要

This paper deals with a manufacturing process where finished goods are produced with undesirable imperfect items which can be reworked. Due to imperfection of the system, some non-reworkable defectives are produced during the manufacturing and rework processes. Based on the stated scenarios, inventory models are developed for a single-stage production process where defective items are reworked within the production cycle, scrap is detected and discarded during entire process. Also, the scrap detection process takes place in three stages: (i) before rework, (ii) during rework, and (iii) after rework. It is also assumed that all customers are willing to wait for new supply when shortage occurs due to scrap. To fulfill customers' demand a permissible backordering is involved. The total cost functions for a single-stage imperfect manufacturing system are developed with 100% inspection to find the optimum operational policy for manufacturing batch sizes, economic production quantity and optimal backordering quantity. The model is verified and validated though numerical example and sensitivity analysis.