The classical economic production quantity (EPQ) model assumes that items
produced are of perfect quality and the production rate is constant.
However, production quality depends on the condition of the process. Due to
process deterioration or other factors, the production process may shift and
produce imperfect quality items. These imperfect quality items sometimes can
be reworked and repaired; hence, overall production-inventory costs can be
reduced significantly. In addition, it can be found in practice that the
time or cost required to repetitively produce a unit of a product decreases
when the number of units produced by a worker or a group of workers
increases. Under this circumstance, the unit production cost cannot be
regarded as constant and, therefore, cannot be ignored when taking account
of the total cost. This paper incorporates the effects of learning and the
reworking of defective items on the EPQ model since they were not considered
in existing models. An optimal operation policy that minimizes the expected
total cost per unit time is derived. A numerical example is provided to
illustrate the proposed model. In addition, sensitivity analysis is
performed and discussed.
Economic production quantity concerning learning and the reworking of imperfect items