An EOQ model with stock dependent demand and imperfect quality items
DOI:
https://doi.org/10.2298/YJOR1002237IKeywords:
Inventory, stock dependent demand, screening cost, imperfect quality itemsAbstract
This paper deals with an economic order quantity model where demand is stock dependent. Items received are not of perfect quality and each lot received contains percentage defective imperfect quality items, which follow a probability distribution. Two cases are considered. 1) Imperfect quality items are held in stock and sold in a single batch after a 100 percent screening process. 2) A hundred percent screening process is performed but the imperfect quality items are sold as soon as they are detected. Approximate optimal solutions are derived in both cases. A numerical example is provided in order to illustrate the development of the model. Sensitivity analysis is also presented, indicating the effects of percentage imperfect quality items on the optimal order quantity and total profit.References
Anily, S., ”Single-machine lot sizing with uniform yields and rigid demands: Robustness of the optimal solution”, IIE Transactions, 27 (5) (1995) 633-635.
Apostol, T.M., ”Mathematical Analysis”, Narosa Publishing House, 2nd edition.
Baker, R.C., and Urban, T.L., ”A deterministic inventory system with an inventory level dependent demand rate”, Journal of the Operational Research Society, 39 (1988) 823-831.
Ben-Deya, M., and Hariga, M., ”Economic lot scheduling problem with imperfect production process”, Journal of the Operational Research Society, 51 (2000) 875-881.
Chakravarty, A.K., and Shtub, A., ”Strategic allocation of inspection effort in a serial, multi-product production systems”, IIE Transactions, 19 (1) (1987) 13-22.
Cheng, C.E., ”An economic order quantity model with demand dependent unit production cost and imperfect production process”, IIE Transactions, 23 (1) (1991) 23.
Datta, T.K., and Pal, A.K., ”A note on inventory model with inventory level dependent demand rate”, Journal of the Operational Research Society, 41 (1990) 971-975.
Goswami, A., and Choudhuri, K.S., ”An EOQ model for deteriorating items with linear time dependent demand rate and shortages under inflation and time discounting”, Journal of the Operational Research Society, 46 (6) (1995) 771.
Levin, R.I., McLaughlin, C.P., Lamone, R.P., Kottas, J.F., Productions/Operations Management Contemporary Policy for Managing Operating Systems, McGraw-Hill, New York, 1972, 373.
Liao, Hung-Chang, Tsai, Chih., and Su, Chao-Ton, ”An inventory model with deteriorating items under inflation when a delay in payment is permissible”, In. Journal of Production Economics, 63 (2000) 207-214.
Mandal, B.N., and Phaujdar, S., ”An inventory model for deteriorating items and stock dependent consumption rate”, Journal of the Operational Research Society, 40 (5) (1989) 483-488.
Pal, S., Goswami, K., and Chaudhuri, K.S., ”A deterministic inventory model for deteriorating items with stock dependent demand rate”, Journal of Production Economics, 32 (1993) 291-299.
Phelps, R.I., ”Optimal inventory role for linear trend in demand with constant replenishment period,” Journal of the Operational Research Society, 31 (5) (1980) 439-442.
Porteus, E.L., ”Optimal lot sizing, process quality improvement and set up cost reduction,” Operations Research, 34 (1) (1986) 137-144.
Ritchie, E., and Tsado, A., ”Stock replenishment quantities for unbounded linear increasing demand: An interesting consequence of the optimal policy,” Journal of the Operational Research Society, 36 (8) (1985) 737-739.
Rosenblat, M.J., and Lee, H.L., ”Economic production cycles with imperfect production process,” IIE Transactions, 18 (1986) 48-55.
Rosenblat, M.J., and Lee, H.L., ”Simultaneous determination of production cycles and inspection schedules in a production system”, Management Science, 33 (1987) 1125-1137.
Salameh, M.K., and Jaber, M.Y., ”Economic production quantity model for items with imperfect quality”, Int. Journal of Production Economics, 64 (2000) 59-64.
Schwaller, R.L., ”EOQ under inspection costs,” Production Inventory Management, 29 (3) (1988) 22.
Silver, E.A., and Peterson, R., Decision Systems for Inventory Management and Production Planning, 2nd edition, Willy, New York.
Silver, E.A., ”A simple inventory replenishment decision rule for a linear trend in demand,” Journal of the Operational Research Society, 30 (1) (1979) 71-75.
Silver, E.A., and Meal, H.C., ”A simple modification of the EOQ for the case of a varying demand rate,” Production and Inventory Management 10 (4) (1979) 52-56.
Urban, T.L., ”Deterministic models incorporating marketing decisions,” Computer and Industrial Engineering, 22 (1) (1992) 85-93.
Urban, T.L., ”An inventory model with an inventory level dependent demand rate and relaxing terminal conditions”, Journal of Operational Research Society, 43 (7) (1992) 721-724.
Zhang, X., and Gerchak, Y., ”Joint lot sizing and inspection policy in an EOQ model with random yield”, IIE Transactions, 22 (1) (1990) 41-47.
Downloads
Published
Issue
Section
License
Copyright (c) 2010 YUJOR
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
