The Derivation of Production Lot Sizing With Imperfect Quality, Inspection and Rework Using an Algebraic Approach

Abstract

Many researchers use traditional computing processes that take the first and second-order partial derivatives to obtain closed form mathematical equations for the optimal order quantity or the optimal production quantity. However, this paper provides an algebraic approach to solving the production lot-sizing problem in an imperfect production inventory system where an inspection process is conducted during and at the end of production, and any defective items produced are either sold at a discounted price or reworked/ repaired at a cost. Using this approach, practitioners or first-year college students who lack knowledge of differential calculus may be able to find solutions to inventory problems more easily.