An imperfect production process for time varying demand with inflation and time value of money – An EMQ model

The paper deals with an economic manufacturing quantity (EMQ) model for time-dependent (quadratic) demand pattern. Every manufacturing sector wants to produce perfect quality items. But in long run process, there may arise different types of difficulties like labor problem, machinery capabilities problems, etc., due to that the machinery systems shift from in-control state to out-of-control state as a result the manufacturing systems produce imperfect quality items. The imperfect items are reworked at a cost to become the perfect one. The rework cost may be reduced by improvements in product reliability i.e., the production process depend on time and also the reliability parameter. We want to determine the optimal product reliability and production rate that achieves the biggest total integrated profit for an imperfect manufacturing process using Euler–Lagrange theory to build up the necessary and sufficient conditions for optimality of the dynamic variables. Finally, a numerical example is discussed to test the model which is illustrated graphically also.

► We consider an EMQ model which produces a single type of items. ► During long-run process machine produces defective items which are reworked at a cost. ► The production of the defective items increases with time and depends on reliability of the system. ► We model a time-dependent demand with reliability as a decision variable under the effect of inflation and time value of money. ► We find the associated profit function which is maximized by the control theory.