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Optimal lot size for EPQ inventory model for items of different qualities.(economic production quantity)
1. INTRODUCTION
The classic economic production quantity (EPQ) model assumes that 100% of the items produced by a manufacturing process during a production run are of perfect quality. Due to deterioration or other factors, the production process may shift and produce some items of a lesser quality. In this paper, we extend the classical economic production quantity model to the case where the item produced is of different qualities. During production, items are produced at a certain rate and screened. Each item is classified as type A, for perfect quality, or type B, otherwise. For simplicity, we assume that the percentage of type A items produced is a constant ...
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