Research on EPQ Model Based on Random Defective Rate

In the real economic life, it is inevitable that a lot of phenomena will happen, such as damage in transportation and machine failure, which may generate a certain percentage of defective products in the process of logistics and production. Especially in the production process, the stoppage on the production line often brings about defective products. To provide mathematical models that more closely conform to actual inventories and respond to the factors that contribute to inventory costs, based on the classical EPQ model, this paper develops an EPQ model for defective items with a certain price relative to the defective level. And this paper also considers the issue that defective items are sold at a lower price which depends on the degree of product defects. A mathematical model is developed and numerical examples are provided to illustrate the solution procedure. The research will enrich researches and it has important practical significance