THE OPTIMUM SELECTION OF IMPERFECT QUALITY ECONOMIC MANUFACTURING QUANTITY AND PROCESS MEAN BY CONSIDERING QUADRATIC QUALITY LOSS FUNCTION

In this paper, we present a modified economic manufacturing quantity (EMQ) model under the imperfect product quality. Taguchi's quadratic quality loss function is adopted for measuring the product quality. The modified EMQ model denotes the total loss to the society which includes the producer's loss and the customer's loss. The total inventory cost of the modified EMQ model includes the set-up cost, the holding cost, and the product cost. The perfect and imperfect reworks of product are considered in the modified EMQ model, respectively. By solving the modified EMQ model, we can obtain both the optimum combination of EMQ and process mean in order to have the minimum total loss of society.