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Lot Sizing in Supply Chain Scheduling with Two Items Production System and Rework

Mahboubeh Ghasemi and S. Hamid Mirmohammadi
Department of Industrial and Systems Engineering, Isfahan University of Technology, Isfahan, Iran

Abstract—In this paper, an extended version of economic production quantity problem (EPQ) in which a final product consisted of two parts is considered. In this problem there is a dual echelon supply chain which includes the parts suppliers in first level and the final product producer in the second one. In both echelon, it is assumed that the production process accomplishes with a positive defective rate which may be different for parts and final product. In this study, production rate and rework rate is limited, demand is continuous, and shortage is not permitted. The problem is modeled by average cost approach and the optimal lot size is determined. The model is validated by illustrating numerical example.

Index Terms—economic production quantity, lot sizing, supply chain management, defective production, rework

Cite: Mahboubeh Ghasemi and S. Hamid Mirmohammadi, "Lot Sizing in Supply Chain Scheduling with Two Items Production System and Rework," Journal of Traffic and Logistics Engineering, Vol. 4, No. 2, pp. 178-183, December 2016. doi: 10.18178/jtle.4.2.178-183
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