Abstract

Traditionally, the inventory models available in the literature assume that all articles in the purchased lot are perfect and the demand is constant. However, there are many causes that provoke the presence of defective goods and the demand is dependent on some factors. In this direction, this paper develops an economic order quantity (EOQ) inventory model for imperfect and perfect quality items, taking into account that the imperfect ones are sent as a single lot to a repair shop for reworking. After reparation, the items return to the inventory system and are inspected again. Depending on the moment at which the reworked lot arrives to the inventory system, two scenarios can occur: Case 1: The reworked lot enters when there still exists inventory; and Case 2: The reworked lot comes into when the inventory level is zero. Furthermore, it is considered that the holding costs of perfect and imperfect items are distinct. The demand of the products is nonlinear and dependent on price, which follows a polynomial function. The main goal is to optimize jointly the lot size and the selling price such that the expected total profit per unit of time is maximized. Some theoretic results are derived and algorithms are developed for determining the optimal solution for each modeled case. It is worth mentioning that the proposed inventory model is a general model due to the fact that this contains some published inventory models as particular cases. With the aim to illustrate the use of the proposed inventory model, some numerical examples are solved.

Highlights

  • One of the main goals of any company is to have the right levels of inventory in order to satisfy the demands of the customers, but accomplishing this goal is not an easy task

  • (iii) When the imperfect items are sold as a single batch, there exists a known and constant demand D (i.e., β = 0), and when the selling price is given as an input parameter and the holding cost for perfect and imperfect items are the same (i.e., h g = hd = h), the inventory model of Maddah and Jaber [10] can be used

  • In the literature related to inventory models with imperfect goods, the holding costs for perfect and imperfect articles are regularly assumed to be the same; the demand is considered as known and constant

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Summary

Introduction

One of the main goals of any company is to have the right levels of inventory in order to satisfy the demands of the customers, but accomplishing this goal is not an easy task. Lin [17] developed an EOQ inventory model with imperfect quality with quantity discounts, taking into consideration the lot splitting shipments policy. Taking into consideration that the holding costs for perfect and imperfect articles are different, Shekarian et al [29] introduced an EOQ inventory model with imperfect goods subject to learning and fuzziness. Alamri et al [31] stated an efficient inventory control for imperfect goods They derived an EOQ inventory model for products with imperfect quality in an environment with fluctuating demand, defective articles, an inspection process, and deterioration.

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