Combining an alternative multi-delivery policy into economic production lot size problem with partial rework

Highlights? This paper combines an alternative multi-delivery policy into an imperfect EPQ model with partial rework. ? It extends the work of Chiu et al. Journal of Scientific & Industrial Research, 2009; 68(6); 505-512]. ? It incorporates an n+1 delivery policy instead of n deliveries for the purpose of reducing vendor's inventory holding cost. ? Mathematical modeling is used and as a result a closed-form optimal replenishment lot size solution to the problem is derived. ? A numerical example demonstrates that the research results serve the purpose of reducing vendor's holding cost significantly. This paper combines an alternative multi-delivery policy into an imperfect economic production quantity (EPQ) model with partial rework, with the purpose of reducing supplier's stock holding cost. We extend the problem examined by Chiu et al. Chiu, Y.-S. P, Chiu, S. W., Li, C.-Y., & Ting, C.-K. (2009). Incorporating multi-delivery policy and quality assurance into economic production lot size problem. Journal of Scientific and Industrial Research, 68(6), 505-512] by considering an n+1 delivery policy in lieu of n multi-delivery plan for the specific EPQ model with partial rework. Under such a policy, an initial delivery of perfect (finished) items is distributed to customer for satisfying product demand during manufacturer's regular production time and rework time. At the end of rework, fixed quantity n installments of the finished products are delivered to customer at a fixed interval of time. As a result, a closed-form optimal replenishment batch size solution to the problem is obtained. A numerical example with analysis and comparison is provided to show practical usage of the proposed model and demonstrate its significant savings in stock holding cost.