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An integrated lot-sizing model for imperfect production with multiple disposals of defective items

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Figure

Figure 1 depicts the behavior of inventory levels for the vendor and the buyer. Since the fraction of defective items is  (or the fraction of good quality items is 1 ), the vendor would produce 1 nQ units to meet the demand of nQ units during an order c
Figure 2. Vendor's accumulated inventory and buyer's accumulated inventory with n = 8 and n M = 3.
Figure 3. The graphic diagram for the integrated total relevant cost in Example 1.
Table 2 shows that the optimal number of shipments per order cycle slightly increases as the vendor's setup cost increases

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