Issue: 2019/Vol.29/No.1, Pages 121-130
APPLICATION OF A SINGLE SAMPLING PLAN MINIMIZING THE SUM OF RISKS IN AN EOQ MODEL WITH TRADE CREDIT
Cite as: P. Veerakumari, A. Harikrishnan. Application of a single sampling plan minimizing the sum of risks in an EOQ model with trade credit. Operations Research and Decisions 2019: 29(1), 121-130. DOI 10.5277/ord190107
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.
Keywords: trade credit, economic order quantity (EOQ), minimum sum of risks, Poisson distribution
Received: 22 May 2018 Accepted: 3 April 2019