An enhanced EPQ model: Incorporating Weibull distribution deterioration, defective items, and dynamic demands for sustainable production optimization

Abstract

This research proposes an innovative modification to the Economic Production Quantity (EPQ) model that integrates Weibull-distributed gradual deterioration, holding costs, variable demands, and effective strategies for managing shortages and backlogs. The extended EPQ model is designed to optimize production quantity and total variable cost for items with slow degradation, particularly perishable goods. The model is based on modeling inventory with three different demand patterns and utilizing analytical methods for solving ordinary differential equations by incorporating Maclurin series approximation techniques. The proposed model addresses deterministic time-varying demand and defective items during the production processes. The research contributes valuable insights into inventory management and production planning, it has significant implications for decision-making in specifically perishable goods production industries. Two examples are given to validate the model's applicability, finally sensitivity analysis and the scope of possible future research are suggested.

Keywords

• Variable demands
• Holding cost
• Non-instantaneous Weibull distribution deteriorating
• Defective items