Determining optimum reject allowances for deteriorating production systems

Mohan Vachani

Naval Research Logistics Quarterly, 1969, vol. 16, issue 3, 275-286

Abstract: Since most manufacturing processes inevitably produce some defective items, it is common practice to produce a quantity larger than the actual order size. This excess is called a reject allowance. In this paper we consider production processes which undergo stochastic deterioration and demonstrate that under appropriate conditions a smallest optimum reject allowance exists and can be easily computed. We also investigate the optimality of periodic process inspections and show that in some cases one can do better by following an (r, R) inspection‐processing policy.

Date: 1969
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Persistent link: https://EconPapers.repec.org/RePEc:wly:navlog:v:16:y:1969:i:3:p:275-286

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