EPQ with process capability and quality assurance considerations

EPQ with process capability and quality assurance considerations

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Article ID: iaor1992442
Country: United Kingdom
Volume: 42
Issue: 8
Start Page Number: 713
End Page Number: 720
Publication Date: Aug 1991
Journal: Journal of the Operational Research Society
Authors:
Keywords: quality & reliability
Abstract:

The classical economic production quantity (EPQ) model assumes that items produced are of perfect quality and that the unit cost of production is fixed. However, in realistic situations, product quality is never perfect but is directly affected by the production processes and the quaity assurance programme. In addition, the unit production cost is not fixed but increases with quality assurance expenses. The paper presents an EPQ model with imperfect production processes and quality-dependent unit production cost. After discussion of the procedure for determining the optimal solution, a sensitivity analysis of the impacts of the cost parameters on the optimal solution is provided. Finally, the problems associated with cost estimation are addressed.

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