The Process Strategy in Rework Production

Rework is defined as the transformation of production rejects into re-usable products of the same or lower quality. Rework can be very profitable, especially if disposal costs are high and if materials are expensive and limited in availability. This paper deals with the reworking in a production line that is dedicated to a single product and that uses the same facilities for production and rework. Produced lots may be non-defective, reworkable defective or non-reworkable defective. Reworkable defective lots deteriorate over time, which effects the rework time and the rework cost. We consider a disposal strategy and two types of rework strategies. We derive expressions for the average profit per time unit, including costs for production, rework, disposal, procurement of input materials, and storage of reworkable defective lots. Using those expressions, the strategies can be compared numerically.