Incorporation of quality and environmental concerns in production and inventory models has received considerable attention in the inventory management literature; however, researchers studied these

Economic order quantity models for items with imperfect quality and emission considerations

A synergic economic order quantity model with trade credit, shortages, imperfect quality and inspection errors

Production lot sizing with quality screening and rework

We consider an inventory installation, controlled by the periodic review base stock (S, T) policy and facing a fixed-rate deterministic demand which, if unsatisfied, is backordered. The supply process is unreliable, so supply deliveries may fail according to an independent Bernoulli process; we refer to such failures reflecting the supply service quality and being internal to the supply chain, as endogenous disruptions. We seek to jointly determine the two policy variables, so to minimize long-run average cost. While an approximate model for this problem was recently analyzed, we present an exact analysis, valid for two common accounting schemes for inventory cost evaluation: continuous and end-of-cycle costing. After developing a unified (and exact) average cost model for both costing schemes, the cost for each scheme is analyzed. In both cases, the optimal policy variables and cost prevail in closed-form, having an identical structure to those of EOQ (with backorders). In fact, under continuous costing, the optimal solution reduces to EOQ for perfect supply. Analytical properties, demonstrating the impact of deteriorating supply quality on the optimal policy, are established. Moreover, computations reveal the cost impact of deploying heuristics that either ignore supply disruptions or rely on inaccurate costing information.

EOQ with independent endogenous supply disruptions

Economic production lot sizing under imperfect quality, on-line inspection, and inspection errors: Full vs. sampling inspection

In many cases the quality of each item in a lot is checked. Speeding up the quality checking process increases the responsiveness of the system and saves cost. The percentage of defective items is a random variable and two models are proposed. In one of the models the system remains always at the same state, while in the other one after each order cycle, the state of the system may change, thus the percentage of defective items may be different in consecutive periods. In both cases the speed of the quality checking is a variable, and procedures are provided to find the optimal lot sizes and screening speed for general and specific investment cost functions. The characteristics of the two model settings will largely be different when the percentage of defective items is high. Among the important managerial insights gained is that a high unit backlogging cost, especially spurs the system to invest more intensively into improving the quality checking process.

Lot sizing in case of defective items with investments to increase the speed of quality control

We consider an Economic Order Quantity (EOQ) model with imperfect quality items. All the items undergo a quality screening process for which both the cost and the defect detection rate depend on th...

Analysis of screening decisions in inventory models with imperfect quality items

Joint quality and pricing decisions in lot sizing models with defective items

In this paper, we consider an Economic Order Quantity (EOQ) model with imperfect quality items. The items undergo quality screening for which both the cost and the defect detection rate depend on the time spent on this operation. We consider various functional forms for the screening cost and the defect detection functions. In particular, nonlinear forms lead to nonconvexities in the total cost function. We solve the model analytically for a selected set of assumptions and provide discussion and managerial implications.

Zsuzsanna Hauck

Papers

Lot sizing in case of defective items with investments to increase the speed of quality control

Analysis of screening decisions in inventory models with imperfect quality items

Joint quality and pricing decisions in lot sizing models with defective items

Optimizing the speed of screening in an EOQ model with speed-dependent defect detection rate in a nonlinear form

Impact of Early Inspection on the Performance of Production Systems – Insights from an EPQ model