Abstract
During production process, we may encounter with some defective items in spite of all preventive measures. The defective items are either rejected immediately at the time of production or reworked and sold as good ones or customers are given enough refund to maintain the goodwill of the company. Here, no. of defective items is assumed to be some fraction of production. Moreover higher price of a product trims down the demand and vice versa. Also in the market, it is seen that large stacks of consumer goods display lead the customers to buy more. The article considers this realistic situation and involves price-sensitive stock dependent demand. As production advances, we have defective items as a part of outcome. So production rate is one of the key features for the present model while calculating the profit. Cycle time and retail price are the very obvious factors affecting the profit. Hence, maximum total profit is achieved with respect to production rate, cycle time and retail price. When there are no defective items in production process, the optimal results are obtained as well.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
References
Cárdenas-Barrón LE (2008) Optimal manufacturing batch size with rework in a single-stage production system-a simple derivation. Comput Ind Eng 55(4):758–765
Cárdenas-Barrón LE (2009a) On optimal batch sizing in a multi-stage production system with rework consideration. Eur J Oper Res 196(3):1238–1244
Cárdenas-Barrón LE (2009b) Economic production quantity with rework process at a single-stage manufacturing system with planned backorders. Comput Ind Eng 57(3):1105–1113
Chiu SW (2007) Optimal replenishment policy for imperfect quality EMQ model with rework and backlogging. Appl Stoch Models Bus Ind 23(2):165–178
Chiu SW, Ting CK, Chiu YSP (2007) Optimal production lot sizing with rework, scrap rate, and service level constraint. Math Computer Model 46(3–4):535–549
Flapper SDP, Teunter RH (2004) Logistic planning of rework with deteriorating work-in-process. Int J Prod Econo 88(1):51–59
Inderfuth K, Lindner G, Rachaniotis NP (2005) Lot sizing in a production system with rework and product deterioration. Int J Prod Res 43(7):1355–1374
Jamal AMM, Sarker BR, Mondal S (2004) Optimal manufacturing batch size with rework process at a single-stage production system. Computer Ind Eng 47(1):77–89
Khouja M (2000) The economic lot and delivery scheduling problem: common cycle, rework, and variable production rate. IIE Trans 32(8):715–725
Lin CS (1999) Integrated production inventory models with imperfect production processes and a limited capacity for raw materials. Math Computer Model 29(2):81–89
Lin GC, Kroll DE (2006) Economic lot sizing for an imperfect production system subject to random breakdowns. Eng Optim 38(1):73–92
Rosenblatt J, Lee HL (1986) Economic production cycles with imperfect production process. IIE Trans 18(1):48–55
Sarkar B, Cárdenas-Barrón LE, Sarkar M, Singghi ML (2014) An EPQ inventory model with random defective rate, rework process and backorders for a single stage production system. J Manuf Syst 33(3):423–435
Schrady DA (1967) A deterministic inventory model for repairable items. Nav Res Logist 14(3):391–398
Sheu SH, Chen JA (2004) Optimal lot-sizing problem with imperfect maintenance and imperfect production. Int J Syst Sci 35(1):69–77
Taleizadeh AA, Cárdenas-Barrón LE, Mohammadi B (2014) A deterministic multi product single machine EPQ model with backordering, scraped products, rework and interruption in manufacturing process. Int J Prod Econ 150:9–27
Taleizadeh AA, Kalantari SS, Cárdenas-Barrón LE (2015) Determining optimal price, replenishment lot size and number of shipments for an EPQ model with rework and multiple shipments. J Ind Manag Optim 11(4):1059–1071
Teunter RH (2001) Economic ordering quantities for recoverable item inventory systems. Nav Res Logist 48(6):484–495
Teunter R (2004) Lot-sizing for inventory system with product recovery. Comput Ind Eng 46(3):431–441
Treviño-Garza G, Castillo-Villar KK, Cárdenas-Barrón LE (2015) Joint determination of the lot size and number of shipments for a family of integrated vendor–buyer systems considering defective products. Int J Syst Sci 46(9):1705–1716
Wee HM, Chung CJ (2009) Optimising replenishment policy for an integrated production inventory deteriorating model considering green component-value design and remanufacturing. Int J Prod Res 47:1343–1368
Wee HM, Wang WT, Cárdenas-Barrón LE (2013) An alternative analysis and solution procedure for the EPQ model with rework process at a single-stage manufacturing system with planned backorders. Comput Ind Eng 64(2):748–755
Widyadana GA, Wee HM (2010) Revisiting lot sizing for an inventory system with product recovery. Comput Math Appl 59(8):2933–2939
Yang PC, Wee HM, Chung SL, Ho PC (2010) Sequential and global optimization for a closed-loop deteriorating inventory supply chain. Math Comput Model 52(1–2):161–176
Yoo SH, Kim DS, Park MS (2009) Economic production quantity model with imperfect-quality items, two-way imperfect inspection and sales return. Int J Prod Econ 121(1):255–265
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
About this article
Cite this article
Shah, N.H., Patel, D.G. & Shah, D.B. EPQ model for returned/reworked inventories during imperfect production process under price-sensitive stock-dependent demand. Oper Res Int J 18, 343–359 (2018). https://doi.org/10.1007/s12351-016-0267-4
Received:
Revised:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s12351-016-0267-4