On a finite production model with random defective rate and shortages allowed and backordered

Abstract

Chiu and Chiu (2003) studied the problem of random defective rate on the Economic Production Quantity (EPQ) model with backorder permitted. They considered a random defective rate and all defective items assumed not repaired. In this note, we will offer a simple algebraic approach to replace his differential calculus skill to find the optimal production lot size and optimal maximal backorder level allowed under the expected annual cost minimized.

Keywords:

• Scrap item
• imperfect quality
• production quantity
• lot sizing
• inventory
• algebraic method