Economic order quantity model for imperfect quality items with environmental regulations

Abstract

In real life situation, advance technologies are used to produce items but due to some technical error imperfect items are produced. Therefore it is necessary to separate these imperfect items by complete screening process and such items are sold at discounted price at the end of screening process. This paper study about the EOQ model for imperfect items with shortage and zero lead time. Additionally, it provides a model to reduce emissions by including carbon cap, carbon tax, carbon cap and offset and carbon price. The main purpose of the developed model is to reduce the carbon emission when there are imperfect items using KKT(Karush Kuhn Tucker) conditions and the impact of imperfect quality items can be seen in the sensitive analysis part. The retailer should be more vigilant while ordering. Numerical examples are provided to illustrate the procedure.

Keywords

• inventory management
• economic order
• carbon emission
• environmental regulations
• screening cost
• imperfect quality