An EOQ model with process reliability considerations

P K Tripathy, Wee W-M and P R Majhi
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P K Tripathy: Utkal University
Wee W-M: Chung Yuan Christian University
P R Majhi: Nilachal Institute of Computer Science

Journal of the Operational Research Society, 2003, vol. 54, issue 5, 549-554

Abstract: Abstract The classical economic order quantity (EOQ) model assumes that items produced are of perfect quality and that the unit cost of production is independent of demand. However, in realistic situations, product quality is never perfect, but is directly affected by the reliability of the production process. In this paper, we consider an EOQ model with imperfect production process and the unit production cost is directly related to process reliability and inversely related to the demand rate. In addition, a numerical example is given to illustrate the developed model. Sensitivity analysis is also performed and discussed.

Keywords: inventory; economic order quantity (EOQ); quality; demand and process reliability (search for similar items in EconPapers)
Date: 2003
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Citations: View citations in EconPapers (7)

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DOI: 10.1057/palgrave.jors.2601540

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