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Economic order quantity and purchasing price for items with imperfect quality when inspection shifts from buyer to supplier

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  • Rezaei, Jafar
  • Salimi, Negin

Abstract

Traditional Economic Order Quantity (EOQ) models, implicitly assume that all items that are received are perfect. Although recent EOQ models for items with imperfect quality, which relax this assumption, are closer to real-world problems, they implicitly assume that suppliers do not conduct a full inspection. In this paper, we study the relationship between buyer and supplier with regard to conducting the inspection and resulting in a change the buyer’s economic order quantity and purchasing price. We model and analyze the problem under two conditions: (1) assuming there is no relationship between the buyer’s selling price, buyer’s purchasing price, and customer demand; (2) assuming there is relationship between the buyer’s selling price, buyer’s purchasing price, and customer demand. Numerical examples are provided to illustrate the models.

Suggested Citation

  • Rezaei, Jafar & Salimi, Negin, 2012. "Economic order quantity and purchasing price for items with imperfect quality when inspection shifts from buyer to supplier," International Journal of Production Economics, Elsevier, vol. 137(1), pages 11-18.
  • Handle: RePEc:eee:proeco:v:137:y:2012:i:1:p:11-18
    DOI: 10.1016/j.ijpe.2012.01.005
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    References listed on IDEAS

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    2. Chang, Hung-Chi, 2013. "An economic production quantity model with consolidating shipments of imperfect quality items: A note," International Journal of Production Economics, Elsevier, vol. 144(2), pages 507-509.
    3. Taleizadeh, Ata Allah & Khanbaglo, Mahboobeh Perak Sari & Cárdenas-Barrón, Leopoldo Eduardo, 2016. "An EOQ inventory model with partial backordering and reparation of imperfect products," International Journal of Production Economics, Elsevier, vol. 182(C), pages 418-434.
    4. Pal, Brojeswar & Sana, Shib Sankar & Chaudhuri, Kripasindhu, 2014. "Joint pricing and ordering policy for two echelon imperfect production inventory model with two cycles," International Journal of Production Economics, Elsevier, vol. 155(C), pages 229-238.
    5. Jaber, Mohamad Y. & Zanoni, Simone & Zavanella, Lucio E., 2014. "Economic order quantity models for imperfect items with buy and repair options," International Journal of Production Economics, Elsevier, vol. 155(C), pages 126-131.

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