Economic production quantity with rework process at a single-stage manufacturing system with planned backorders

In traditional inventory models such as the economic order quantity (EOQ) and the economic production quantity (EPQ) the sole objective is to minimize the total inventory-related costs, typically holding cost and ordering cost. These models do not consider the presence of defective products in the lot or rework of them. Recently, Jamal, Sarker, and Mondal (Jamal, A. A. M., Sarker, B. R., & Mondal, S., (2004). Optimal manufacturing batch size with rework process at single-stage production system. Computers and Industrial Engineering, 47(1), 77–89) proposed a model, which dealt with the optimum batch quantity in a single- stage system in which rework is done by addressing two different operational policies to minimize the total system cost, but their models do not consider planned backorders. In this direction, this paper develops an EPQ type inventory model with planned backorders for determining the economic production quantity for a single product, which is manufactured in a single-stage manufacturing system that generates imperfect quality products, and all these defective products are reworked in the same cycle. We also establish the range of real values of the proportion of defective products for which there is an optimal solution, and the close form for the total cost of inventory system. The use of the inventory model is illustrated with numerical examples. The classical EOQ, EPQ inventory models with or without planned backorders and Jamal, Sarker and Mondal’s model (Jamal, A. A. M., Sarker, B. R., & Mondal, S., (2004). Optimal manufacturing batch size with rework process at single-stage production system. Computers and Industrial Engineering, 47(1), 77–89) are shown to be special cases of the EPQ inventory model presented in this paper.