An economic production quantity model with the rework process of repairable defective items

This paper considers the Economic Production Quantity (EPQ) model with the rework process of repairable defective items. In most practical production settings, due to process deterioration or other factors, manufacturing process may produce defective items. In this study, we assume that the imperfect quality rate is a random variable, and the reworking of defective items starts immediately when regular production ends. Furthermore, not all of the defective items are reworked, a portion of them are scraps and are discarded beforehand. Disposal cost per scrap item and the repairing and holding cost per reworked item are included in our inventory cost analysis. Since scrap items are produced, it follows that the cycle length is not a constant, the renewal reward theorem approach is utilized to cope with the variable cycle length, and an optimal lot size that minimizes the expected overall inventory costs is derived.