2024, Vol. 5, Issue 1, Part B
A study on economic order quantity models with a reference to shortages for imperfect items
Author(s): Manisha Meena
Abstract: The Economic Order Quantity (EOQ) model is a fundamental inventory management technique that helps businesses determine the optimal order quantity to minimize the total cost of inventory. The traditional EOQ model assumes perfect quality items and no shortages. However, in real-world scenarios, these assumptions may not always hold true. This article explores the complexities of EOQ models when dealing with imperfect items and the potential for shortages. Imperfect items can arise due to various reasons, such as manufacturing defects, transportation damages, or expired products. When a portion of an order consists of imperfect items, it can lead to several challenges. Imperfect items may need to be sold at a discount or discarded altogether, reducing revenue. Screening and disposal of imperfect items can incur additional costs. If the number of imperfect items is significant, it can lead to shortages, potentially resulting in lost sales and customer dissatisfaction. To address these challenges, researchers have developed extensions to the traditional EOQ model that incorporate the possibility of shortages and imperfect items. The cost of screening items to identify and separate imperfect ones. The cost of disposing of imperfect items. The cost associated with lost sales or backorders due to shortages. The proportion of imperfect items in an order.
Pages: 177-181 | Views: 222 | Downloads: 114
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How to cite this article:
Manisha Meena. A study on economic order quantity models with a reference to shortages for imperfect items. Journal of Mathematical Problems, Equations and Statistics. 2024; 5(1): 177-181.
