A Production Batch Policy for a Manufacturing System under Imperfect Quality and Continuous Cost Decrease

To consider decreasing trend in unit cost and imperfect quality process in a production system, this study presents an optimal batch policy under the maturity stage of a product life cycle. We assume a manufacturing system that receives raw materials with an income quality control (IQC) process and converts them to a finished product with an outcome quality control (OQC) process. The defective raw materials are returned after inspection and finished products are reworked after regular production immediately. In addition, not all of the defective items are reworked but a portion of them is discarded due to serious damage. The objective is to minimize the total cost in this system. In this study, a recursive algorithm was developed to obtain the production schedule and a one-dimension search method to archive the number of production cycles.