An EPQ Model of Stock Dependent Demand Subject to Epidemic with Stochastic Lockdown Time

Abstract

The model created considers the effect of the epidemic on the classical Economic Production Quality (EPQ) model for a production unit exposed to stochastic lockdown time. Expected production time is evaluated utilizing continuous probability density function. The investigation is done to decide the ideal arrangement for the production system which limits the expected total cost per unit time exposed to certain conditions. Here EPQ model is created by taking lockdown time due to epidemic as stochastic. Machine breakdown affects the manufacturer but disaster like epidemic affects the manufacturer as well as the customer (or in other words, demand). During the production uptime, demand depend upon stock and decline in selling price, but in case of disaster (epidemic) selling price has no consideration and demand depends only on stock. The model is discussed by means of a numerical example and a case study.