TY - JOUR
T1 - Disaggregation and consolidation of imperfect quality shipments in an extended EPQ model
AU - Yassine, Ali
AU - Maddah, Bacel
AU - Salameh, Moueen
PY - 2012/1
Y1 - 2012/1
N2 - We consider a standard economic production quantity (EPQ) model. Due to manufacturing variability, a fraction P of the produced inventory will have imperfect quality, where P is a random variable with a known distribution. We consider a 100% inspection policy and further assume that the inspection rate is larger than that of production. Thus, all imperfect quality items will be detected by the end of the production cycle. For such an augmented EPQ model, we first derive the new optimal production quantity assuming that the imperfect quality items are salvaged once at the end of every production cycle. Then, we extend this base model to allow for disaggregating the shipments of imperfect quality items during a single production run. Finally, we consider aggregating (or consolidating) the shipments of imperfect items over multiple production runs. Under both scenarios we derive closed-form expressions for both the economic production quantity and the batching policy, and show that our desegregation/consolidation schemes can lead to significant cost savings over the base model.
AB - We consider a standard economic production quantity (EPQ) model. Due to manufacturing variability, a fraction P of the produced inventory will have imperfect quality, where P is a random variable with a known distribution. We consider a 100% inspection policy and further assume that the inspection rate is larger than that of production. Thus, all imperfect quality items will be detected by the end of the production cycle. For such an augmented EPQ model, we first derive the new optimal production quantity assuming that the imperfect quality items are salvaged once at the end of every production cycle. Then, we extend this base model to allow for disaggregating the shipments of imperfect quality items during a single production run. Finally, we consider aggregating (or consolidating) the shipments of imperfect items over multiple production runs. Under both scenarios we derive closed-form expressions for both the economic production quantity and the batching policy, and show that our desegregation/consolidation schemes can lead to significant cost savings over the base model.
KW - Aggregation
KW - Batching
KW - Consolidation
KW - Economic production quantity (EPQ)
KW - Imperfect quality
KW - Lot sizing
KW - Screening
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U2 - 10.1016/j.ijpe.2011.08.010
DO - 10.1016/j.ijpe.2011.08.010
M3 - Article
AN - SCOPUS:80055047692
SN - 0925-5273
VL - 135
SP - 345
EP - 352
JO - International Journal of Production Economics
JF - International Journal of Production Economics
IS - 1
ER -