An EOQ model with process reliability considerations

An EOQ model with process reliability considerations

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Article ID: iaor2004946
Country: United Kingdom
Volume: 54
Issue: 5
Start Page Number: 549
End Page Number: 554
Publication Date: May 2003
Journal: Journal of the Operational Research Society
Authors: , ,
Keywords: quality & reliability
Abstract:

The classical economic order quantity (EOQ) model assumes that items produced are of perfect quality and that the unit cost of production is independent of demand. However, in realistic situations, product quality is never perfect, but is directly affected by the reliability of the production process. In this paper, we consider an EOQ model with imperfect production process and the unit production cost is directly related to process reliability and inversely related to the demand rate. In addition, a numerical example is given to illustrate the developed model. Sensitivity analysis is also performed and discussed.

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