A two - warehouse inventory model for items with imperfect quality and penalty costs under screening errors

This paper corrects an improper expression in the economic order quantity (EOQ) model with two-warehouses and imperfect quality developed by Chung et al. [2009. A twowarehouse inventory model with imperfect quality production processes. Computers & Industrial Engineering 56, 193-197]. The modiT ed model yields a simple and corrected expression for the optimal order quantity and expected proT t per unit time. This paper then extends the above idea to a case involving a 100% inspection process with screening errors that may occur under imperfect quality and two warehouses. A model, in which it includes two scenarios, with imperfect quality and penalty costs under screening errors (Type I and Type II error) is developed. The eV ects of percentage of defective items and screening errors on the optimal solution are investigated. A numerical example is provided for the developed model and its result reveals that the order lot size and expected total proT t considering in this paper is less than Chung et al. [2009]. Managerial insights are also draw.