Effects of product reliability dependent demand in an EPQ model considering partially imperfect production

Abstract

In this article, an economic production quantity (EPQ) model with partially imperfect production system has been considered where both perfect and imperfect quality items are produced and demand of the product has been assumed as a function of selling price, reliability of the product and advertisement. Perfect quality items are ready for sale but imperfect quality items are reworked at a cost to become perfect one. Reworking cost, reliability of the product and reliability parameter of the manufacturing system can be improved by introducing the time dependent development cost and also by improving the quality of the raw material used in the production system. Under such circumstances, a profit function has been developed and maximised by optimising the reliability parameter of the manufacturing system, reliability of the product and duration of production. Finally, the model has been illustrated with some numerical examples.