Economic production quantity models for deteriorating items with rework and stochastic preventive maintenance time

Abstract

Economic production quantity (EPQ) models for deteriorating inventory have been investigated by many researchers in recent years. In this paper, we develop EPQ models for deteriorating items with rework and stochastic preventive maintenance time. The models are solved using a search method, since a closed form solution cannot be derived. A numerical example and sensitivity analysis are provided to evaluate the models. The sensitivity analysis shows that the deteriorating cost has a significant effect on the optimal inventory cost; however, the production and the demand rate have the most significant effect on the optimal total cost and the optimal production up-time period.

Keywords:

• EPQ
• deteriorating item
• preventive maintenance
• rework
• lost sales

Acknowledgements

This research was supported by the National Research Counsel, research fund number NSC95-2221-E-033-091. The authors greatly appreciate the anonymous referees for their valuable and constructive comments on the earlier version of the paper.