Consider the cost of poor quality in an EPQ model

: In this paper, we consider a production system where products areproduced with normal distribution quality characteristic. In order to evaluate theproduct quality, the concept of Taguchi quality loss function is used in our model. Anumerical case is introduced to verify our model.We also compare the economicproduction quantity and annual profit to the classical economic production quantity(EPQ) model. It is found that the economic production quantity in our model is largerthan the economic production quantity in the classical EPQ model and the annualprofit is equal to or less than that in the classical model. It is found that the economicproduction in our model will increase with the demand rate and the defect rate.