An EPQ model with inflation in an imperfect production system

In this paper, a production inventory model is considered for stochastic demand with the effect of inflation. Generally, every manufacturing system wants to produce perfect quality items. However, due to real-life problems (labor problems, machine breakdown, etc.), a certain percentage of products are of imperfect quality. The imperfect items are reworked at a cost. The lifetime of a defective item follows a Weibull distribution. Due to the production of imperfect quality items, a product shortage occurs. The profit function is derived by using both a general distribution of demand and the uniform rectangular distribution of demand. Computational experiments along with graphical illustrations are presented to discuss the optimality of the probability functions. (C) 2010 Elsevier Inc. All rights reserved.