Economic production quantity (EPQ) model for three type imperfect items with rework and learning in setup

Abstract

Imperfect quality items are unavoidable in an inventory system due to imperfect productionprocess, natural disasters, damages, or many other reasons. The setup cost and production cycle timecan be related in terms of process deterioration and learning and forgetting effects. Learning reducesproduction run length and setup cost, whereas deterioration and forgetting increases both. Keepingthese facts in mind, this paper investigates an Economic Production Quantity (EPQ) model withimperfect quality items with varying set-up costs. Mathematical model and solution procedures aredeveloped with major insight to its characteristics. Numerical example and sensitivity analysis areprovided to illustrate and analyze the model performance. It can be observed that our model has asignificant impacts on the optimal lot size and optimal profit of the model