An Modified EPQ Model with Deteriorating Production System and Deteriorating Product

The proposed study considers both product deterioration and production process deterioration in a traditional Economical Production Quantity model. In this model, backlog and rework process are also taken into consideration while the production process is assumed to be imperfect. Unserviceable products will be manufactured as a result. Unserviceable products are kept in storage until the end of the normal production run and then reworked to condition that can meet the standard of customer requirement. The production quality is also assumed to be deteriorative. The production process is assumed to be in control when the production run starts and the defective rate is relatively. At a certain point, the deterioration and switch of states occurs and the defective rate increases to a higher value. After the normal production cycle, the state of machine will be restored in control state. The overall objective of this study is to minimize the expected total cost by determining the combination of total production quantity and backlog quantity.