An EMQ inventory model for defective products involving rework and sales team’s initiatives-dependent demand

Authors

1 Department of Mathematics, Mepco Schlenk Engineering College, Sivakasi, 626 005, Tamil Nadu, India

2 Department of Mathematics, The Gandhigram Rural Institute-Deemed University, Gandhigram, 624 302, Tamil Nadu, India

Abstract

This paper investigates the issue of an economic manufacturing quantity model for defective products involving imperfect production processes and rework. We consider that the demand is sensitive to promotional efforts/sales teams’ initiatives as well as the setup cost can be reduced through further investment. It also assumes that fixed quantity multiple installments of the finished batch are delivered to customers at a fixed interval of time. The long-run average cost function is derived and its convexity is proved via differential calculus. An effective iterative solution procedure is developed to achieve optimal replenishment lot-size, setup cost and the initiatives of sales teams so that the total cost of system is minimized. Numerical and sensitivity analyses are performed to evaluate the outcome of the proposed solution procedure presented in this research.

Keywords