Article ID: | iaor20116811 |
Volume: | 9 |
Issue: | 3 |
Start Page Number: | 259 |
End Page Number: | 283 |
Publication Date: | Jul 2011 |
Journal: | International Journal of Services and Operations Management |
Authors: | Sana Shib Sankar, Chaudhuri Kripasindhu, Sarkar Biswajit |
Keywords: | simulation: applications, combinatorial optimization |
The paper deals with an economic production quantity (EPQ) model for both continuous and discrete random demand of merchandise. Usually, 100#37; of the total product is not of perfect quality, in practice. A certain percent of the total product is of imperfect quality, which follows a probability distribution. The imperfect quality items are reworked at a cost. The percent of defectiveness in the total product usually increases with an increase in production run time. The associated expected integrated profit is maximised by analytical calculus method. The solution of the model is first derived for a general distribution function and then it is analysed for uniform and Poisson distribution of demand. Numerical examples along with the graphical illustrations are lastly provided to illustrate the study of optimal cost functions of the system.