Abstract
Economic ordering quantity is a commonly accepted inventory management model. Its variant economic production quantity (EPQ) model is also a widely researched inventory model. The number of researchers had developed the EPQ model by considering different parameters, such as shortage, backorder, setup cost, deterioration, constant or linear or power form of the demand, rework, scrap, inspection, machine breakdown, etc. The objective of this paper is to review the literature, identify the gap in literature, develop and expand the knowledge base regarding EPQ models. This state of art paper would act as a guideline for researchers. The wide spectrum of the subject provides interesting future research problems.
Highlights
Every organization deals with inventory and adopts suitable inventory management system
The classical economic production quantity (EPQ) model has been used in industry and research for a long time
A literature review reveals that there are a number of EPQ models developed by various researchers
Summary
Every organization deals with inventory and adopts suitable inventory management system. Effective inventory management helps organizations to save money. Inventory management must determine how much and when to order/produce each item purchased/manufactured by the organization (Mehdi et al, 2011). The machine failure, state of the production process, product quality, and inflation has the important role in the determination of the optimal inventory replenishment policy (Feng-Tsung et al, 2010; Kuo-Lung, 2007; Singh et Singh, 2012). It is observed that, when items are produced internally instead of being obtained from the outside, the EPQ model is often used to determine the optimal production lot size in order to minimize the total inventory and production cost (Shamsi et al, 2009). A considerable amount of the research has been carried out to enhance the classical EOQ\EPQ model. The objective of this paper is to review the related literature and find out the research gap and future scope for research
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