ECONOMIC ORDER QUANTITY MODEL FOR PRICE-SENSITIVE QUADRATIC DEMAND WITH IMPERFECT QUALITY UNDER INSPECTION

Abstract

In conventional EOQ models, it is anticipated that all the products arrived are unspoiled in the quality. But it is not the case in practice. In this article, an EOQ model with two different situations is presented. In the first one, the buyer receives imperfect items which need to be inspected. This incurs inspection cost to the buyer. While in second situation buyer gets no imperfect
items. But for this he has to pay some more amount. This concept is elaborated here. The price and time sensitive demand is incorporated in analysis to study the effect of imperfect quality. The model is confirmed through numerical example and sensitivity analysis is figured out to deduce the managerial insights.