Mathematical method for expediting scrap-or-rework decision making in EPQ model with failure in repair (Q1011913)

Summary: This study uses a mathematical method to develop an efficient rule for expediting scrap-or-rework decision making in Economic Production Quantity (EPQ) model with failure-in-repair. The expected overall production-inventory costs and the optimal lot sizes for EPQ models with/without rework process are derived and compared. With straightforward numerical derivations, this paper develops an efficient rule including the exact critical value of unit repair cost for each reworked item and its approximation equations, to assist in determining whether it is beneficial to rework the repairable items. Numerical example with sensitivity analysis and discussion are provided to demonstrate their practical usages.