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Article

Solving an EPQ Model with Rework and Service Level Constraint

1
Department of Industrial Engineering and Management, Chaoyang University of Technology, Taichung, Taiwan
2
Department of Business Administration, Chaoyang University of Technology, Taichung 413, Taiwan
3
Department of Industrial Engineering and Management, Chaoyang University of Technology, Taichung, Taiwan
*
Author to whom correspondence should be addressed.
Math. Comput. Appl. 2006, 11(1), 75-84; https://doi.org/10.3390/mca11010075
Published: 1 April 2006

Abstract

This paper examines an economic production quantity (EPQ) model with rework and service level constraint. First, we prove that the expected overall costs for an imperfect EPQ model with backlogging permitted is less than or equal to that of the one without backlogging. Secondly, the relationship between “imputed backorder cost” and maximal shortage level is derived for decision-making on whether the required service level is achievable. Then an equation for calculating the intangible backorder cost is proposed for situation when the required service level is not attainable. By including this intangible backorder cost in mathematical analysis, one can derive a new optimal lot-size policy that minimizes expected total costs as well as satisfies the maximal shortage level constraint for the EPQ model with rework. Numerical example is provided to demonstrate its practical usage.
Keywords: Manufacturing; Economic production quantity; Service level constraint; Reworking Manufacturing; Economic production quantity; Service level constraint; Reworking

Share and Cite

MDPI and ACS Style

Chiu, Y.-S.P.; Chiu, S.W.; Lin, H.-D. Solving an EPQ Model with Rework and Service Level Constraint. Math. Comput. Appl. 2006, 11, 75-84. https://doi.org/10.3390/mca11010075

AMA Style

Chiu Y-SP, Chiu SW, Lin H-D. Solving an EPQ Model with Rework and Service Level Constraint. Mathematical and Computational Applications. 2006; 11(1):75-84. https://doi.org/10.3390/mca11010075

Chicago/Turabian Style

Chiu, Yuan-Shyi Peter, Singa Wang Chiu, and Hong-Dar Lin. 2006. "Solving an EPQ Model with Rework and Service Level Constraint" Mathematical and Computational Applications 11, no. 1: 75-84. https://doi.org/10.3390/mca11010075

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