Imperfect production system with rework and scrap at a single stage manufacturing system and integrates cost reduction delivery policy

Abstract

This paper deals with a production inventory model with reworkable defective items and integrates a cost reduction delivery policy. In this work, it is assumed that in each cycle the rework process of all defective items starts when the regular production process finishes. After the rework process, a portion of reworked items fails and this portion becomes scrap. In this paper, two models are developed, in the first model, the perfect finished items can be delivered to customers at the end of rework process and in the second model, integrates cost reduction delivery policy and finished items can only be delivered to customers at a fixed interval of time during production down time with the purpose of reducing holding cost. The objective is to derive the optimal production lot size, number of deliveries and the finished items are delivered by request to customers at a fixed interval of time that minimises total costs. The relevant model is built, solved and necessary and sufficient conditions for a unique and global optimal solution are derived. An illustrative example is provided and numerically verified. The validation of result in this model was coded in Microsoft Visual Basic 6.0.