Determining Replenishment Lot Size and Shipment Policy for an EPQ Inventory Model with Delivery and Rework

Abstract

The determination of production-shipment policies for a vendor-buyer system is dealt within this paper. The main objective is to derive the optimal replenishment lot size and shipment policy for an EPQ inventory model with multiple deliveries and rework. This inventory model contains two decision variables: the replenishment lot size and the number of deliveries. Previous researches solve this inventory model considering both variables to be continuous. However, the number of deliveries must be considered as a discrete variable. In this direction, this paper solves the inventory model considering two cases: Case 1: the replenishment lot size as a continuous variable and the number of shipments as a discrete variable and Case 2: the replenishment lot size and the number of shipments as discrete variables. The final results are two simple and easy-to-apply solution procedures to find the optimal values for the replenishment lot size and the number of deliveries for each case.

Self-Remanufacturing or Outsourcing? Hybrid Manufacturing System With Remanufacturing Options Under Yield Uncertainty

“…They demonstrated the benefits of the sampling inspection of returns when making procurement decision. For the yield uncertainty caused by quality defects in the production process, Taleizadeh et al [25] and Cárdenas-Barrón et al [26] used an EPQ inventory model with reworkable defective items to study the optimal production lot size and pricing problems and the optimal replenishment lot size and shipment policy of suppliers respectively. Taleizadeh et al [27] considered reworkable defective products and employed an EOQ inventory model to study the buyer's inventory problem when the products had quality defects and could not be replaced immediately by qualified products.…”

Solution Procedure for Inventory Models with Linear and Fixed Backorder Costs

“…Eight papers referred to Omar et al [4] in their references: Cárdenas-Barrón [2], Chung and Cárdenas-Barrón [3], Wee et al [5,6], Cárdenas-Barrón et al [7], Khalilpourazari et al [8], Afshar-Nadjafi et al [9], and Jonrinaldi et al [10]. We can separate those eight papers into two groups.…”

“…We can separate those eight papers into two groups. e first group contains Wee et al [5,6], Cárdenas-Barrón et al [7], Khalilpourazari et al [8], Afshar-Nadjafi et al [9], and Jonrinaldi et al [10]. e second group contains Cárdenas-Barrón [2] and Chung and Cárdenas-Barrón [3].…”

“…Wee et al [6] considered EPQ models with nonsynchronized screening and reworking. Cárdenas-Barrón et al [7] constructed EPQ models with delivery and rework. Khalilpourazari et al [8] studied the multiproduct EPQ model with partial backorders.…”

Cost Minimization for a Multi-Product Fabrication-Distribution Problem with Commonality, Postponement, and Quality Assurance

“…In contrast to the classic EPQ model [27] that considers a perfect production system with a continuous issuing policy for end items, the real-world vendor-buyer integrated systems, due to various uncontrollable factors in production, randomly generate some nonconforming items [28][29][30][31][32], and the finished products are often distributed practically by a periodic or multi-delivery policy rather than a continuous one [33][34][35][36][37][38][39][40][41]. In additional to the product quality inspections, further actions on quality assurance matters, including categorizing scrap and repairable items and the reworking of repairable nonconforming products [42][43][44][45][46][47][48][49][50][51][52][53], have also been extensively explored in terms of lowering quality cost in production and quality assurance. Inspired by the potential advantages of postponement strategy and reflection of the real-world vendor-buyer integrated systems, this study explores a multi-product fabrication-distribution problem with component commonality, postponement strategy, and quality assurances using a single machine production scheme.…”