Disaggregation and consolidation of imperfect quality shipments in an extended EPQ model

▶ We consider a standard economic production quantity model with imperfect quality. ▶ All imperfect quality items will be detected by the end of the production cycle. ▶ For this base model, we derive the optimal production quantity. ▶ We allow for aggregating/disaggregating the shipments of imperfect items. ▶ We show that desegregation/consolidation can lead to savings over the base model.