Modified Imperfect Economic Manufacturing Quantity Model with Limited Investment Capital

Abstract

Traditional economic manufacturing quantity model assumes that the perfect product for production. Recently, Teng proposes an imperfect production process with limited investment capital for determining the optimal investment cost and production run time. Teng assumes that the percentage of process defectives with uniform distribution is a decreasing function of the investment cost. However, Teng's model does not include the customer's used cost for the conforming product. In this study, the authors adopt another investment cost function, i.e., the exponential reduction of process mean and standard deviation as the function of quality investment cost, for formulating the modified Teng's model. Taguchi's quadratic quality loss will be used for measuring the product quality. Finally, the numerical example and sensitivity analysis of parameters are provided for illustration.