Optimization of an Imperfect Manufacturing System for Deteriorating Items with Rework and Shortage Under Inflation

Abstract

In this research, an imperfect manufacturing inventory model for deteriorating items has been developed wherein a manufacturer produces items in m determined imperfect replenishment cycles. In each replenishment cycle, production facility can produce items in four different imperfect replenishment cycles and one rework-run, (m : 4 − 1) policy. Demand rate is considered as inflation rate and selling price dependent. Many researchers focused on economic production quantity (EPQ) model under the three assumptions that the items produced in replenishment cycles are all perfect, all the deteriorated items can be detached from the stock, and all the items are produced in a single replenishment cycle. In this work, these three assumptions are relaxed to create positive impact on corporate image and reduce the holding cost of the inventory model. Shortages are allowed and fully backordered. The aim of the research is to determine the optimal replenishment-run time, the economic replenishment lot size, and the optimal backordered quantity so as to minimize the total cost of the inventory model. Finally, a numerical example along with graphical representation and sensitivity analysis is discussed to validate the results of the model.