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It is assumed that all items classified as defective during the screening process are sold as a single batch at a discounted price at the end of this screening process; items returned from the market are accumulating; and all of them are stored and sold as a single batch at a discounted price at the end of the next screening process. All the numerical results show that the proportional size shipment policy is always optimal, except for one situation where the difference between the vendor's and the buyer's unit inventory holding costs is considerably large. 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