OPTIMAL INVENTORY MODEL OF SAMPLE SIZE QUALITY INSPECTION WITH SHORTAGE BACKORDERING AND DISPOSAL COST

W. Ritha

Abstract


The problem of maximizing total profit is one of the operational goals for many companies. In real production environment, the production of defective item is inevitable. In this paper develops an inventory model with imperfect quality items and shortage backordering. The lot transferred from vendor to buyer contains defective items. The buyer conducts a lot inspection process to classify the quality of the items. As it lot inspection is imperfect. The inspector may incorrectly classify non-defective item as defective or incorrectly classify defective item as non-defective. Therefore buyer send back defective items to vendor with buyer’s payment of additional transportation cost and scrap ones are disposed at a cost. Shortages at buyer are allowed and completely backordered. The objective is to identify the total profitof optimal order size, sample size and backorder size of the inventory model. Numerical examples are given to illustrate the model.

Keywords: Production, Imperfect quality, Sampling inspection, Inspection errors, complete backordering.


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