Inventory Model with Zero Defective Smart Production System

A smart production system is characterized by quality productive mechanisms integrated with technology. In this research work, a quality-centered inventory model with the objective of minimizing waste generation is formulated to develop zero defective productive scenarios. In this model, the repairable items are identified and classified into batches based on 4 levels of quality. Level 1 compromises products that are less than 25% defective. Level 2 consists of the remaining products which are up to 50% defective. Level 3 and Level 4 consist of products that are up to 75% and 100% defective. The model also comprises quality maintenance cost parameters with demand expressed as the function of quality and market price. The obtained optimal order quantity expression and annual net revenue is validated and sensitively analyzed with numerical data. The proposed model shall be extended with the inclusion of product distribution entities with respective cost parameters to formulate a more comprehensive quality and eco-centric inventory model. Mathematics Subject Classification 90B05, 90B30