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An EOQ model with imperfect quality items, inspection errors, shortage backordering, and sales returns

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  • Hsu, Jia-Tzer
  • Hsu, Lie-Fern

Abstract

In practice the items received in a lot may contain defective items, and the screening process to eliminate the defective items may involve both a Type I and a Type II error. Due to the defective items and the inspection errors, shortages may sometimes occur. In this paper, we develop an economic order quantity model with imperfect quality items, inspection errors, shortage backordering, and sales returns. A closed form solution is obtained for the optimal order size, the maximum shortage level, and the optimal order/reorder point. If shortages are not allowed, we adopt the order overlapping scheme proposed by Maddah et al. (2010) (Computers and Industrial Engineering. 58 (4), 691–695.) to develop an EOQ model to prevent shortages during the screening process. Numerical examples show the impacts of the defective probability, the inspection errors, and the holding and backordering costs on the optimal solution.

Suggested Citation

  • Hsu, Jia-Tzer & Hsu, Lie-Fern, 2013. "An EOQ model with imperfect quality items, inspection errors, shortage backordering, and sales returns," International Journal of Production Economics, Elsevier, vol. 143(1), pages 162-170.
  • Handle: RePEc:eee:proeco:v:143:y:2013:i:1:p:162-170
    DOI: 10.1016/j.ijpe.2012.12.025
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    References listed on IDEAS

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    Cited by:

    1. Tapan Kumar Datta, 2017. "Inventory system with defective products and investment opportunity for reducing defective proportion," Operational Research, Springer, vol. 17(1), pages 297-312, April.
    2. Sarkar, Biswajit & Saren, Sharmila, 2016. "Product inspection policy for an imperfect production system with inspection errors and warranty cost," European Journal of Operational Research, Elsevier, vol. 248(1), pages 263-271.
    3. Skouri, K. & Konstantaras, I. & Lagodimos, A.G. & Papachristos, S., 2014. "An EOQ model with backorders and rejection of defective supply batches," International Journal of Production Economics, Elsevier, vol. 155(C), pages 148-154.
    4. Avinadav, Tal & Herbon, Avi & Spiegel, Uriel, 2014. "Optimal ordering and pricing policy for demand functions that are separable into price and inventory age," International Journal of Production Economics, Elsevier, vol. 155(C), pages 406-417.
    5. Harun Sulak & Abdullah Eroglu & Mustafa Bayhan & M. Ali Avci, 2015. "An Economic Order Quantity Model for Defective Items under Permissible Delay in Payments and Shortage," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 5(1), pages 302-316, January.
    6. 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.
    7. Soheyl Khalilpourazari & Seyed Hamid Reza Pasandideh, 2020. "Multi-objective optimization of multi-item EOQ model with partial backordering and defective batches and stochastic constraints using MOWCA and MOGWO," Operational Research, Springer, vol. 20(3), pages 1729-1761, September.
    8. Pal, Shilpi & Mahapatra, G.S. & Samanta, G.P., 2014. "An EPQ model of ramp type demand with Weibull deterioration under inflation and finite horizon in crisp and fuzzy environment," International Journal of Production Economics, Elsevier, vol. 156(C), pages 159-166.
    9. Lie-Fern Hsu & Jia-Tzer Hsu, 2016. "Economic production quantity (EPQ) models under an imperfect production process with shortages backordered," International Journal of Systems Science, Taylor & Francis Journals, vol. 47(4), pages 852-867, March.
    10. 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.
    11. Naoufel Cheikhrouhou & Biswajit Sarkar & Baishakhi Ganguly & Asif Iqbal Malik & Rafael Batista & Young Hae Lee, 2018. "Optimization of sample size and order size in an inventory model with quality inspection and return of defective items," Annals of Operations Research, Springer, vol. 271(2), pages 445-467, December.
    12. Lee, Sunghee & Kim, Daeki, 2014. "An optimal policy for a single-vendor single-buyer integrated production–distribution model with both deteriorating and defective items," International Journal of Production Economics, Elsevier, vol. 147(PA), pages 161-170.
    13. Tiwari, Sunil & Kazemi, Nima & Modak, Nikunja Mohan & Cárdenas-Barrón, Leopoldo Eduardo & Sarkar, Sumon, 2020. "The effect of human errors on an integrated stochastic supply chain model with setup cost reduction and backorder price discount," International Journal of Production Economics, Elsevier, vol. 226(C).
    14. 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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