Outsourcing Rework of Imperfect Items in the Economic Production Quantity (EPQ) Inventory Model With Backordered Demand

Abstract

This paper deals with an economic production quantity (EPQ) model with imperfect items and backordered demand. The manufacturing system is imperfect and generates a fraction of imperfect items, which is a random variable with a distribution function known. All manufactured items are screened and the imperfect items are identified. The rework of imperfect items cannot be done in the same manufacturing system. The company decides to outsource the rework in a repair store. Therefore, after the screen period all imperfect items are withdrawn and sent to the repair store; and at the end of the reparation process all the repaired items come back to the company and are received by the inventory. There are three cases that can occur depending on when the repaired items enter the inventory. Numerical examples and sensitivity analysis are presented to show the applicability of the three cases of the proposed inventory model.