An imperfect production model under Radio Frequency Identification adoption and trade credit

We develop an economic production quantity model on the basis of radio frequency identification (RFID) adoption, trade credit, and reworking of imperfect products. We determine the optimal values of production cycle time and RFID investment levels for ordering, just-in-time, and operating efficiencies. On the basis of the relationship between the demand and reworking rates, we classify the model into two cases. Furthermore, on the basis of the relationship between production cycle time and credit period, we divide each case into four subcases. We derive the total manufacturing cost for the subcases and develop an algorithm to solve the four-branch piecewise nonlinear problem. Finally, we illustrate the solution approach and perform numerical analyses to discuss the influences of system parameters on decisions.