This paper proposes a cost reduction distribution policy for an integrated manufacturing system operating under quality assurance practice. We reexamine the problem studied by Chiu et al. [Numerical method for determination of the optimal lot size for a manufacturing system with discontinuous issuing policy and rework. International Journal for Numerical Methods in Biomedical Engineering, doi:10.1002/cnm.1369] and improve its replenishment lot-size solution in terms of lowering producer’s stock holding cost. Mathematical modeling and analysis is employed in this study and optimal replenishment lot size is derived. A numerical example is provided to show the practical usage of research result as well as to demonstrate significant savings in producer’s holding cost as compared to that in Chiu et al.
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