Abstract
Determining an optimal batch quantity in a production system that produces defective items has been the primary focus recently among the researchers. While most of the work has been reported to explore the traditional optimal inventory level in ideal cases, little appears to have been done with rework option. In this paper, models have been developed to determine the optimum batch quantity in a single-stage system in which rework is done under two different operational policies to minimize the total system cost. The first policy deals with rework being completed within the same cycle. The second policy deals with the rework being done after N cycles causing less than the desired quantity of good products in each cycle. The models have been validated with illustrating numerical examples and the sensitivity of optimal batch size and total system cost with respect to the defective proportion have also been performed.
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