Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5054621 | Economic Modelling | 2013 | 8 Pages |
Abstract
The optimal replenishment policy for an economic production quantity (EPQ)-based inventory model with nonconforming items and breakdown is presented. A real-life production system inevitably generates nonconforming items and has equipment breakdowns owing to process deterioration or other uncontrollable factors. This study addressed these issues in an EPQ-based system to optimize a replenishment policy that minimizes the long-run average cost for the proposed system. Whenever a breakdown occurs, the machine is assumed to immediately be under repair, and an abort/resume inventory control policy is adopted. Under this control policy production of the interrupted lot resumes immediately after the machine is fixed and restored. A mathematical model and a recursive algorithm were used to derive the optimal replenishment policy. A numerical example was used to demonstrate the practical application and better cost efficiency of the proposed policy compared to a breakdown that occurs under a no-resumption policy.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Singa Wang Chiu, Chung-Li Chou, Wen-Kuei Wu,