Reorder point for the EOQ inventory model with imperfect quality items

Abstract

Abstract In today’s competitive business environment, every manufacturing organization desires to produce good quality items. Likewise, customers are also more concern with the quality of the item, which led to the increased competition among the organizations in ensuring that manufacturers are producing high-quality items. However, in reality, every manufacturing system encounters flawed productions. Keeping this in mind, there exists an economic batch quantity inventory model indicting should any received or produced items are imperfect. The study triggered a significant trend towards the economic lot size model for imperfect items. This research calculates optimal reorder point for Salameh and Jaber [12] ’s inventory model, which is a critical milestone for managers to determine the appropriate timing of an order. Then, a numerical example is solved to obtain the optimal reorder point under different situations. In this study we obtained the reorder point and managerial decisions to control system volatility.