An economic production quantity model with stochastic demand in an imperfect production system

Biswajit Sarkar, Shib Sankar Sana and Kripasindhu Chaudhuri

International Journal of Services and Operations Management, 2011, vol. 9, issue 3, 259-283

Abstract: The paper deals with an economic production quantity (EPQ) model for both continuous and discrete random demand of merchandise. Usually, 100% of the total product is not of perfect quality, in practice. A certain percent of the total product is of imperfect quality, which follows a probability distribution. The imperfect quality items are reworked at a cost. The percent of defectiveness in the total product usually increases with an increase in production run time. The associated expected integrated profit is maximised by analytical calculus method. The solution of the model is first derived for a general distribution function and then it is analysed for uniform and Poisson distribution of demand. Numerical examples along with the graphical illustrations are lastly provided to illustrate the study of optimal cost functions of the system.

Keywords: inventories; stochastic demand; economic production quantities; imperfect production systems; continuous random demand; discrete random demand; merchandise; product quality; probability distribution; item reworking; defectiveness; total product; production run times; expected profit; integrated profit; analytical calculus; general distribution function; uniform distribution; Poisson distribution; optimal cost functions; services management; operations management. (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (10)

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