OPTIMAL PRODUCTION POLICY FOR IMPERFECT QUALITY PRODUCTS

摘要

In this paper, the optimal production policy for imperfect quality products has been discussed. The semi-perfect and imperfect products are sold as different batches at the end of the process in the second market by reducing selling price. The demand rates of all kinds of products are the functions of the reduced selling price for semi-perfect and imperfect quality products. The annual profit function is derived and a solution procedure is established to find out the optimal solution. Finally the solution technique is illustrated with a numerical example.