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Application of a single sampling plan minimizing the sum of risks in an EOQ model with trade credit

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  • Pradeepa Veerakumari
  • Aruna Harikrishnan

Abstract

Acceptance sampling by attributes is a universally used statistical tool for quality control. It is a technique that deals with the decision to accept or reject a batch of goods using defined procedures. An attribute single sampling plan designed under the assumption that the number of defects has a Poisson distribution is the optimal plan whenever the chance of a defect occurring in the manufacturing process is low. This study introduces the incorporation of an attribute single sampling plan minimizing the sum of risks with an economic order quantity (EOQ) model taking into account the possibility of trade credit. The plan ensures the effectiveness of the optimal design based on the minimization of costs including the inspection costs, stock holding costs and ordering costs.

Suggested Citation

  • Pradeepa Veerakumari & Aruna Harikrishnan, 2019. "Application of a single sampling plan minimizing the sum of risks in an EOQ model with trade credit," Operations Research and Decisions, Wroclaw University of Science and Technology, Faculty of Management, vol. 29(1), pages 121-130.
    • Handle: RePEc:wut:journl:v:1:y:2019:p:121-130:id:1395
    DOI: 10.37190/ord190107
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    References listed on IDEAS

    as
    1. K. Subramani & V. Haridoss, 2012. "Selection of a tightened-normal-tightened system for given values of the acceptable quality level and limiting quality level using weighted Poisson distribution," International Journal of Decision Sciences, Risk and Management, Inderscience Enterprises Ltd, vol. 4(3/4), pages 300-313.
    2. Sana, Shib Sankar & Chaudhuri, K.S., 2008. "A deterministic EOQ model with delays in payments and price-discount offers," European Journal of Operational Research, Elsevier, vol. 184(2), pages 509-533, January.
    3. J-T Teng, 2002. "On the economic order quantity under conditions of permissible delay in payments," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 53(8), pages 915-918, August.
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