Economic order quantity models for items with imperfect quality and emission considerations

ABSTRACT

Incorporation of quality and environmental concerns in production and inventory models has received considerable attention in the inventory management literature; however, researchers studied these topics mostly independently. Thus, it is required to jointly incorporate those two relevant aspects in a single research to support decisions, compare the results and obtain new insights for complexities in practice. This paper takes a step in this line of thought and revisits some economic order quantity (EOQ) models with imperfect quality from a sustainable point of view. The objective is to investigate the impact of emission costs on the replenishment order sizes and the total profit of a buyer (retailer) in an imperfect supply process, where the buyer receives the batches containing a percentage of imperfect quality items. First, an EOQ model with imperfect quality items and emission costs, which are the result of warehousing and waste disposal activities, is formulated. Next, the model is extended to account for the situations where the buyer considers different areas for stocking the imperfect and good quality items, learning occurs in imperfect quality and the inspection process at the buyer's end contains error. The developed models are tested numerically and compared to investigate the optimal policies considering emission costs.

KEYWORDS:

• EOQ
• sustainability
• carbon emission
• imperfect quality
• learning
• inspection error

Acknowledgments

The authors would like to express their deepest gratitude to University of Malaya for the financial support under the grant RP033B-15AET.

Disclosure statement

No potential conflict of interest was reported by the authors.

Additional information

Funding

University of Malaya [grant number RP033B-15AE].

Notes on contributors

Nima Kazemi

Nima Kazemi is currently a Ph.D. candidate in the Department of Mechanical Engineering at University of Malaya, Kuala Lumpur, Malaysia. He received his B.Sc. degree in applied mathematics in June 2007 and M.Sc. in industrial engineering-system management and productivity in January 2010. He is also a research assistant in Center for Product Design and Manufacturing (CPDM) at University of Malaya. His current research interests are mainly in the area of sutainable supply chain management and modelling human factors in logistics and operations management.

Salwa Hanim Abdul-Rashid

Salwa Hanim Abdul Rashid is a senior lecturer at the Department of Mechanical Engineering, Faculty of Engineering, University of Malaya, Kuala Lumpur, Malaysia. She obtained her Doctorate degree in 2010 from Cranfield University, United Kingdom. She also holds both Masters and Bachelor degrees in manufacturing management from Loughborough and Salford University, respectively. She is an active researcher interested in understanding issues in the implementation and management of the green strategies, with respect to design and manufacturing process in order for companies to achieve industrial sustainability. Her current research is focused on factors that drives, inhibits and enables manufacturing companies to implement sustainable design and manufacturing strategies.

Raja Ariffin Raja Ghazilla

Raja Ariffin Raja Ghazilla is currently working as a senior lecturer at the Department of Mechanical Engineering, Faculty of Engineering, University of Malaya, Kuala Lumpur, Malaysia. He obtained both his M.Sc. and Ph.D. in mechanical and production engineering from University of Malaya, Kuala Lumpur, Malaysia. His research interests are in the area of manufacturing design focusing on sustainable design, decision making in design and human centered design. He works closely with industry primarily the automotive, manufacturing and SMI. He also holds three patent design.

Ehsan Shekarian

Ehsan Shekarian is currently a Ph.D. candidate at University of Malaya in manufacturing management. He received his BSc in statistics in 2006 at the University of Allameh Tabataba'i in Tehran, Iran. He holds an M.Sc. in ndustrial engineering from the Alghadir Higher Education Institution, Tabriz, Iran in 2009. Furthermore, he has some experiences as a part time lecturer at Payame Noor University and Islamic Azad University. His research interests are in the area of supply chain management, inventory systems, multi-criteria decision making and heuristic applications of artificial intelligence methods. He is the editorial board member of International Journal of Supply Chain and Inventory Management, International Journal of Multivariate Data Analysis, and Journal of Soft Computing and Decision Support Systems.

Simone Zanoni

Simone Zanoni is an associate professor in the Mechanical & Industrial Engineering Department at the University of Brescia, Italy. He graduated (with distinction) in mechanical engineering and took his Doctorate at the University of Brescia, Italy. His main research interests are layout design, inventory management and closed-loop supply chain, environmental and sustainable aspects in supply chain management.