Multi-Item EPQ Model with Scrap, Rework and Multi-Delivery using Common Cycle Policy

Abstract

This paper is concerned with determining the optimal common production cycle policy for a multi-item economic production quantity (EPQ) model with scrap, rework and multiple deliveries. The classic EPQ model considers the optimal replenishment quantity of single product under a perfect production assumption and a continuous inventory issuing policy. However, in real life production planning, manufacturing firms often plan to have multiple products made in turn on a single machine in order to maximize the machine utilization. Also, dealing with random defective items during the production run seems to be an inevitable task, and the multi-delivery policy is commonly adopted for distributing finished items to customers. In this study, we assume a portion of nonconforming items is scrap and the other portion of them can be reworked and repaired in the same production cycle with additional cost. The objective is to determine an optimal common production cycle time that minimizes the long-run average cost per unit time for such a specific multi-item EPQ model with scrap, rework and multi-delivery policy. Mathematical modeling and analysis is used and a closed-form optimal common cycle time for multi-item production planning is obtained. A numerical example is provided to demonstrate the practical usage of research result.

Multi-item inventory policy with time-dependent pricing and rework cost

“…An inventory model for an imperfect production system with rework and shortages also has been developed by Sanjai and Periyasamy (2019). Several other researchers who have also developed models related to imperfect products and rework are Chiu et al (2014) and Chiu et al (2015) studied the optimal common production cycle policy for a multi-item EPQ model with scrap, rework, and multiple deliveries. Nobil et al (2019) introduce an EPQ problem for an imperfect manufacturing system with non-zero setup times for rework items.…”

A production inventory model for single vendor single buyer integrated demand with multiple production setups and rework

“…Hsu and Hsu (2014) considered an EPQ model under an imperfect production process with shortages backordered. Chiu et al (2014) developed an EPQ model for multi-items with scrap, rework and multi-delivery using common cycle policy. Ullah and Kang (2014) presented a more realistic approach for the modelling of optimum lot size and total cost with a focus on the work in process inventory and the effect of rework, rejects and inspection on work in process inventory.…”

A Sustainable Economic Recycle Quantity Model for Imperfect Production System with Shortages

“…Defective items are mainly generated due to faulty production process (Rosenblatt and Lee 1986;Hsu and Hsu 2014). Salameh and Jaber (2000) attempted to modify the traditional EPQ model to consider poor-quality items, while Chiu et al (2014) investigated lot-sizing problems with arbitrary defective rates in finite manufacture systems under rework processes and shortages. Defective items also deteriorate in some cases and emit carbon into the environment (Daryanto and Wee 2019;Mashud et al 2020a).…”