Production lot sizing with quality screening, rework and shortages backordered

Abstract

In the classic EOQ and EPQ models, the assumption that all products are of good quality is not always valid. In some cases, the production system may produce a certain amount of defective products due to human errors and/or wear of machinery and equipment In the literature, defective products obtained with quality screening are categorized as scrap, reworkable, low quality, etc. Generally, low-quality products are sold at a reduced price in lots at the end of the selection procedure, while scrap products are eliminated from the inventory at a certain cost. Reworkable products are also reworked at the end of the quality control period and turned into good products. In our study, screening activities are carried out during the production period in order to acquire the perfect items to run into the demand. For the remaining products, screening activity begins at the end of the production period. Allowing backorder in production systems both provides efficient production schedules and reduces operating costs. In this study, an EPQ model was constructed in which all defective products are taken at coincidental and reworked, and shortages are allowed. Sensitivity analyzes are also provided to evaluate the effects of changes in design variables on the optimal solution and to obtain feasible conditions.