Lotsizing in a Production System with Rework and Product Deterioration

Abstract

Producing new or recovering defective products often takes place on a common facility, with these activities carried out in lots. Consequently, there is a necessity to coordinate the production and rework activities with respect to the timing of operations and also regarding appropriate lot sizes for both processes while completely satisfying a given demand. Thereby, it has to be taken into account whether the state of defective items that await rework worsens (deteriorates, i.e. the rework time and rework costs increase) in the course of time or not. In this paper and EPQ model which addresses all of these aspects is presented. Considering set-up and inventory holding costs as well as set-up times, optimization algorithms are developed covering different planning situations.