Article ID: | iaor20072804 |
Country: | Netherlands |
Volume: | 105 |
Issue: | 2 |
Start Page Number: | 548 |
End Page Number: | 559 |
Publication Date: | Jan 2007 |
Journal: | International Journal of Production Economics |
Authors: | Goyal Suresh Kumar, Sana Shib Sankar, Chaudhuri Kripasindhu |
Keywords: | inventory, optimization |
This paper hypothesizes an imperfect production/inventory system where the items produced are a mixture of perfect and imperfect quality. Some of the imperfect quality items can be sold at a reduced selling price. The unit production cost is taken to be a function of the finite production rate which is treated as a decision variable. The mathematical expression for the expected profit function is derived and it is maximized subject to different constraints of the system using