Abstract

This paper examines fi nite production rate (FPR) model with scrap and multiple deliveries. Classic FPR model assumes continuous issuing policy for satisfying demand and perfect quality production for all items produced. However, in real life vendor-buyer integrated system, multiple shipment policy is practically used and generation of defective items during a production run is inevitable. Mathematical modeling and analysis is used, renewal reward theorem is employed to cope with the variable production cycle length, and the integrated long-run average cost per unit time is derived. A closed-form optimal batch size solution to the problem is obtained. A numerical example demonstrates its practical usage

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