A note on solving the EOQ model with imperfect quality subject to in‐house inspection

A note on solving the EOQ model with imperfect quality subject to in‐house inspection

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Article ID: iaor20116791
Volume: 22
Issue: 3
Start Page Number: 301
End Page Number: 306
Publication Date: Jun 2011
Journal: IMA Journal of Management Mathematics
Authors: ,
Keywords: economic order
Abstract:

Recently, Konstantaras et al. (2007) presented an economic order quantity model with imperfect quality subject to in‐house inspection. In their study, two options for handling defectives were proposed. The first option considered the defective items to be sold at a lower price and the second considered the defective items to be reworked to an acceptable quality standard to meet demand. Their inventory model is interesting and valuable, but the process for evaluating the expected profit per unit time for the first option can be improved. The main purpose of this paper is to offer an alternative approach for the model, where we apply a renewal reward theorem to calculate the expected profit per unit time and solve the model without derivatives. Numerical examples are provided to show the solution procedure.

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